UC-NRLF 


Our  Situation  Today — A  Country* 
Wide  Economic  Survey 


The  Second  Economic  Survey  of  the  American 

Bankers  Association,  Reported  at  the  Convention  of  the 

Association  in  Los  Angers,  October  4,  1921, 

by  John  S.  Drum,  President 


8 


Our  Situation  Today — A  Country- 
wide Economic  Survey 


American  Bankers  Association  Second 
Economic  Survey,  October,  1921 


LAST  SPRING,  when  I  gathered  the  opinions  of  bank- 
ers   and   business   men   throughout   the   country   and 
consolidated    the    information    received    in    the    Eco- 
nomic Survey  that  was  reported  to  the  Executive  Council, 
the    nation's   business   had   just   experienced   a   rapid   fall 
from  the  height  of  war-time  activity. 

The  countries  that  for  six  years  had  been  eager  markets 
for  American  products  of  all  kinds  had  reached  the  point 
at  which  they  could  no  longer  consume  and  pay  for  our 
excess  production.  Costs  of  production  had  mounted  stead- 
ily for  years,  and  at  length  had  become  so  high  that  they 
could  not  be  absorbed  by  foreign  consumers ;  foreign  coun- 
tries, which  had  created  great  debts  and  destroyed  great 
wealth,  simply  did  not  have  the  means  to  pay. 

The  sudden  decline  of  foreign  demand  inevitably  re- 
sulted in  a  reduction  of  the  prices  of  our  products,  regard- 
less of  what  the  cost  of  producing  them  had  been.  This 
reduction  in  values  did  not  uniformly  affect  all  products, 
and  brought  about  a  reduction  in  domestic  purchasing 
power  that  resulted  in  decreased  consumption,  a  reduction 
of  the  output  of  manufactured  goods,  and  unemployment. 

The  debt-making  period  had  ended  and  the  debt-paying 
period  had  begun.  Changed  conditions  had  made  neces- 
sary a  readjustment  of  the  entire  economic  machine,  and 
readjustment  had  started. 

In  many  quarters,  naturally,  there  was  a  tendency  to 
resist  the  forces  working  toward  readjustment.  There  was 
a  natural  unwillingness  to  take  losses,  and  men  were 
unwilling  to  give  up  favored  positions  that  had  come  to 
them  through  the  flush  of  war-time  prosperity. 

Systems  of  taxation  devised  to  meet  war  conditions, 
but  obstructive  of  business  in  normal  times,  were  in  effect. 


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Great  industries  were  operating  under  restrictions  and  reg- 
ulations that  the  Government  had  found  it  necessary  to 
impose  for  the  successful  conduct  of  the  war. 

Business,  in  short,  was  out  of  joint,  and  men  contem- 
plated its  condition  with  uncertainty.  They  were  groping 
for  the  facts. 

It  was  with  the  idea  of  getting  at  the  facts,  of  getting 
a  true  picture  of  conditions  in  this  country  today,  that  this 
second  survey  was  undertaken.  I  sought  the  opinions  of 
the  bankers  and  men  representative  of  the  industries  of 
the  country,  and  the  information  these  men  possessed  by 
reason  of  their  close  contact  with  the  nation's  business. 
More  than  one  thousand  bankers  and  others  replied  to  the 
questionnaires  sent  out  and,  in  addition  to  reporting  the 
progress  of  readjustment,  discussed  the  situation  in  their 
communities. 

This  picture  of  our  situation  is  prepared  from  these 
reports.  They  come  from  the  ranges  of  New  Mexico 
and  Wyoming  and  Texas,  from  the  mines  of  Mon- 
tana and  Arizona  and  Utah,  from  the  coal  mining 
regions  of  Pennsylvania  and  West  Virginia  and  Ohio, 
from  the  industrial  centers  in  New  York  and  Pennsylvania 
and  New  England,  from  the  tier  of  industrial  and  agricul- 
tural and  mining  states  extending  from  the  Atlantic  Ocean 
to  the  Great  Lakes,  from  the  cotton  regions  of  the  South, 
from  the  great  grain  states  of  the  Middle  West,  from  the 
forests  of  the  Northwest — from  every  part  of  the  country. 

The  Volume  of  Manufacturing. 

The  output  of  finished  goods  throughout  the  country  is 
considerably  smaller  than  it  was  a  year  ago,  and  measur- 
ably smaller  than  it  was  six  months  ago.  Although  pro- 
duction as  measured  by  employment  has  decreased  pro- 
gressively throughout  the  year,  our  reports  show  there 
has  been  a  slight  increase  in  the  output  of  some  manu- 
factured products  in  the  last  few  months.  This  increase 
has  been  most  noticeable  in  industries  devoted  to  the  pro- 
duction of  essential  articles  of  food  and  clothing,  and  is 
commonly  ascribed  in  reports  received  in  this  survey  to 
two  causes : 

First,  the  gradual  depletion  of  surplus  stocks  of  these 
goods  that  had  accumulated  a  year  ago;  and 

Second,  a  seasonal  increase  in  the  demand  for  them. 

Whatever  slight  increase  in  the  output  of  finished 
goods  as  a  whole  has  taken  place  has  not  been  shared  by 
iron  and  steel  products,  heavy  machinery  and  farm  imple- 


ments,  if  production  of  these  commodities  in  the  country 
as  a  whole  is  considered  as  a  unit. 

The  reasons  commonly  given  by  the  men  whose 
reports  make  up  this  survey  for  the  steady  decline  in  the 
output  of  these  articles  throughout  the  year  are : 

First,  comparative  stagnation  of  activity  in  construc- 
tion; 

Second,  delay  in  railroad  repair  and  replacement  work; 

Third,  comparatively  small  reduction  in  the  prices  of 
iron  and  steel  and  their  products;  and 

Fourth,  lessened  purchases  of  new  equipment  and  sup- 
plies by  farmers. 

Surplus  Stocks  Reduced. 

Taking  the  country  as  a  whole  and  considering  all 
classes  of  finished  goods  there  is  a  surplus  of  manufac- 
tured commodities  in  the  hands  of  the  producers.  These 
surplus  stocks  have  been  reduced  gradually  throughout 
the  year  and,  as  replacements  have  become  increasingly 
necessary,  more  rapidly  in  the  last  six  months.  In  many 
industrial  centers  manufacturers  are  limiting  production 
to  orders  received.  This  is  reported  to  be  due  partly  to 
the  inability  to  obtain  credit  to  carry  surplus  stocks  and 
partly  to  uncertainty  caused  by  fluctuations  in  the  prices 
of  raw  materials. 

Costs  of  Manufacturing. 

A  progressive  decline  in  the  costs  of  manufacturing 
has  taken  place  during  the  year.  In  industry  as  a 
whole,  the  costs  of  materials,  labor  and  construction  have 
declined  in  the  order  named. 

The  larger  part  of  the  drop  in  the  cost  of  materials 
took  place  during  the  first  six  months  of  the  year.  Re- 
cently this  decline  has  been  checked  and  prices  have 
steadied.  The  recent  revival  in  the  clothing  industry  in 
New  York  presents  a  good  example  of  the  effects  of  re- 
duced production.  When  activity  in  the  clothing  indus- 
try declined  production  of  wool  textiles  was  decreased 
accordingly.  When  the  demand  for  clothing  sharply  in- 
creased a  short  time  ago,  and  manufacturing  took  an  up- 
ward turn,  a  shortage  of  woolen  cloth  soon  developed. 
The  price  of  woolen  textiles  increased,  but  clothing  manu- 
facturers, unable  to  get  cloth,  found  themselves  after  a 
long  period  of  reduced  activity  in  a  position  where  they 
were  unable  to  fill  orders. 

The  reduction  in  the  cost  of  labor,  reports  considered 
in  this  survey  show,  has  been  due  to  two  causes: 


First,  reduced  wages  or  longer  hours  for  the  same 
wages;  and 

Second,  increased  efficiency. 

Wages. 

In  industry  as  a  whole  the  greater  part  of  the  wage 
reduction  has  occurred  in  the  last  six  months.  Wage 
reductions  in  many  instances  have  been  effected  by  the 
voluntary  acceptance  by  labor  of  decreased  rates  of  pay 
or  longer  hours  of  work.  In  other  instances  labor  has 
returned  to  work  after  trying  by  strikes  to  resist  wage 
cuts,  and  in  still  others  manufacturers  have  shut  down 
their  plants  and  then  opened  them  again,  re-employing 
part  of  their  forces  at  reduced  wages. 

Increased  efficiency  of  labor  has  been  the  natural  result 
of  unemployment  on  a  large  scale.  Competition  for  em- 
ployment, largely  eliminated  during  the  war  and  for 
eighteen  months  after  the  armistice,  has  been  restored  dur- 
ing the  last  year  and  particularly  in  the  last  six  months, 
and  in  many  industries  in  which  wage  reductions  have 
been  slight  the  cost  of  labor  has  been  decreased  by  reason 
of  greater  efficiency  and  a  greater  volume  of  per  man 
production. 

Reports  received  in  this  survey  are  that  notable  excep- 
tions to  the  common  reduction  of  the  cost  of  labor  are 
apparent  in  three  great  industries,  railroading,  coal  mining 
and  the  building  trades.  Railroad  wage  scales  still  are 
fixed  by  the  Railroad  Labor  Board,  a  Government  agency, 
and  the  continued  enforcement  of  shop  rules  made  during 
the  period  of  Government  control  have  made  difficult 
an  increase  in  the  efficiency  of  skilled  railroad  labor. 
These  shop  rules  have  compelled  the  use  of  a  number  of 
men  for  work  that  could  be  performed  by  one.  Besides 
increasing  costs  by  causing  much  lost  motion,  these  rules, 
in  effect,  limit  the  work  a  man  is  permitted  to  do  and  in 
many  cases  force  payment  for  work  that  actually  is  not 
done. 

In  the  coal  mines  wages  are  fixed  by  agreements  that 
will  not  expire  until  next  spring  and  are  kept  at  war 
levels  while  wages  in  metal  mining  have  come  down. 
There  have  been  some  slight  reductions  in  the  wages  of 
skilled  laborers  in  the  building  trades,  but  in  most  cases 
these  have  been  made  only  after  costly  strikes  that  have 
offset  to  a  great  degree  any  reduction  in  cost  that  might 
have  accrued  from  reduced  wages.  The  efficiency  of  men 
in  the  building  trades  in  the  country  as  a  whole  has  not 
increased,  although  there  are  exceptions  to  this. 


In  neither  railroading,  coal  mining  nor  the  building 
trades  have  the  hours  of  work  been  increased. 

The  decreased  price  of  lumber  and  some  other  building 
materials,  however,  has  been  responsible  for  some  slight 
decline  in  construction  costs. 

Taxation  and  Transportation. 

Taxation  in  the  industrial  sections  has  either  increased 
or  remained  stationary  during  the  year;  in  no  case  is  a 
decrease  reported.  Increased  taxation  is  due  largely  to 
greater  state,  county  and  municipal  levies. 

On  the  whole,  reports  received  in  this  survey  attribute 
no  part  of  the  reduction  in  the  costs  of  production  to  any 
decrease  in  the  cost  of  transportation.  Freight  rates,  of 
course,  follow  the  decisions  of  the  Interstate  Commerce 
Commission  and  none  but  minor  changes  have  taken 
place  since  increased  rates  were  made  effective  in  August, 
1920. 

Prices  of   Finished   Goods. 

Wholesale  prices  of  manufactured  goods  have  decreased 
steadily  throughout  the  year.  Food  products,  which  de- 
clined more  rapidly  than  most  other  finished  goods  in  the 
early  part  of  the  year,  have  dropped  in  price  at  a  less 
rapid  rate  during  the  last  six  months,  and  recently  the 
fall  has  been  checked  altogether  and  there  has  been  a 
slight  upward  turn  in  some  food  products.  Considering 
manufactured  goods  as  a  whole,  however,  the  price  decline 
has  been  uniform  and  progressive  from  month  to  month. 

Retail  prices  on  the  whole  also  have  declined  steadily 
throughout  the  year,  although  not  in  the  same  proportion 
as  wholesale  prices.  Costs  of  transportation  and  selling, 
entering  into  retailing  to  a  greater  extent  than  into  manu- 
facturing and  wholesaling,  undoubtedly  have  been  factors 
in  causing  the  disparity  between  the  decline  of  wholesale 
and  retail  prices. 

Lumber  and  Metals. 

Natural  products  such  as  lumber  and  metals,  whose 
output  may  be  regulated  at  the  will  of  the  producer,  are 
produced  in  smaller  quantities  today  than  they  were  a 
year  ago  and  in  smaller  quantities  than  six  months  ago. 
Reports  in  this  survey  attribute  this  decrease  in  produc- 
tion to : 

First,  lack  of  demand; 

Second,  prices  so  low  as  to  make  production  at  pre- 
vailing costs  and  prevailing  freight  rates  unprofitable ;  and 


Third,  the  existence  of  large  surplus  stocks  that  have 
been  reduced  at  a  very  slow  rate  during  the  year. 

Inactivity  in  construction  at  home  and  a  decided  fall 
in  the  foreign  demand  have  greatly  reduced  the  consump- 
tion of  copper,  lead,  iron  and  lumber.  At  the  peak  of 
war-time  and  post-war  activity  all  these  metals  and  lum- 
ber were  produced  in  great  quantities,  and  when  the 
demand  slackened  miners  and  lumber  producers  found 
themselves  overstocked.  The  metals  had  been  mined  and 
the  lumber  had  been  cut  at  peak  costs  of  labor  and  mate- 
rials, and  consequently  when  demand  fell  off  and  prices 
declined  it  was  impossible  to  sell  these  stocks  except  at 
prices  that  would  not  net  a  profitable  return  over  the  costs 
of  production. 

In  view  of  these  conditions  continued  production  was 
of  course  out  of  the  question,  and  last  year  many  mines 
and  lumber  mills  were  shut  down  altogether,  while  the 
output  of  those  that  remained  in  operation  was  greatly 
reduced.  During  the  year  the  surplus  stocks  of  metals 
and  lumber  have  been  gradually  cut  down,  but  they 
remain  abnormally  large. 

In  the  last  few  months  an  increasing  Oriental  demand 
has  operated  to  increase  production  in  the  lumber  district 
in  the  Pacific  Northwest,  but  the  output  of  lumber  in  the 
Southeast  remains  low.  Copper  and  zinc  production  is 
very  low. 

Labor  costs  in  the  metal  mines  and  in  the  lumber 
industry  have  been  reduced  in  the  last  year  and  in  the 
last  six  months,  according  to  our  reports.  As  in  the 
manufacturing  industries,  this  has  been  due  to  competition 
for  work  resulting  from  unemployment,  and  to  the  conse- 
quent reduction  in  wages  and  increase  of  efficiency.  Costs 
of  machinery  and  supplies  used  in  metal  mining  and  lum- 
ber producing  have  declined  during  the  year,  but  not  as 
much  as  the  costs  of  labor.  Transportation  costs  and 
taxation,  of  course,  remain  high. 

The  prices  received  by  producers  for  metals  and  lum- 
ber, while  considerably  lower  than  they  were  in  1920,  have 
not  declined  greatly  in  the  last  six  months.  Retail  prices 
of  lumber,  however,  have  declined  more  rapidly  in  the  last 
six  months  than  in  the  preceding  half  year. 

Agricultural  Products. 

Except  for  a  very  much  smaller  output  of  cotton  result- 
ing from  a  great  reduction  in  acreage,  and  eliminating  from 
consideration  the  effects  of  climatic  conditions,  the  produc- 
tion of  agricultural  products  is  as  great  as  it  was  last 

6 


year.  Our  reports  are  that  surplus  stocks  that  existed  after 
the  harvest  last  autumn  have  been  gradually  decreased 
throughout  the  year,  but  the  new  harvest,  of  course,  pro- 
duces another  surplus. 

The  great  carry-over  of  cotton  has  been  steadily  re- 
duced, and  the  quickened  demand  that  has  developed  quite 
recently  indicates  reduction  at  a  more  rapid  rate  from 
now  on. 

The  sustained  output  of  agricultural  products  does  not 
find  a  parallel  in  the  livestock  industry.  Low  prices  and 
curtailed  markets  for  cattle,  hogs,  sheep  and  wool  have 
operated  to  decrease  activity  in  breeding  and  fattening 
livestock.  Reports  received  in  this  survey  are  that  in  a 
large  number  of  cases  the  reduction  in  values  and  the  diffi- 
culty of  obtaining  adequate  credit  to  finance  their  opera- 
tions have  forced  livestock  men  to  sell  their  cattle  for 
slaughter,  breeding  herds  along  with  the  rest.  In  some 
ranging  states  this  condition  has  been  an  important  factor 
in  causing  the  accumulation  of  surplus  stocks  of  hay  and 
other  feed.  The  $50,000,000  livestock  pool  and  the  Agri- 
cultural Relief  Bill  were  largely  designed  to  remedy  these 
conditions. 

Labor  costs  in  agriculture  and  stock-raising  have  de- 
clined steadily  throughout  the  year,  more  rapidly  in  the 
last  six  months  than  in  the  first.  Comparatively  little  of 
this  reduction  had  taken  place  at  the  time  crops  were 
planted,  but  the  steady  and  material  decline  in  the  costs 
of  labor  for  cultivating  and  harvesting  have  effected  a 
great  reduction  in  agricultural  costs  as  a  whole. 

Farm  implements  and  supplies  have  not  declined  in 
cost  at  a  rate  comparable  to  the  reduction  in  labor  costs, 
and  whatever  reduction  in  these  items  has  taken  place 
has  come  in  the  last  six  months.  Transportation  costs 
have  not  been  reduced. 

While  the  prices  received  by  farmers  and  ranchers  for 
agricultural  products  and  livestock  have,  of  course,  fallen 
greatly  in  the  last  year,  the  decline  in  the  last  few  months 
has  not  been  appreciable,  and  common  opinion  is  that 
natural  products  on  the  whole  have  dropped  about  as  far 
as  they  are  going  to  drop,  and  in  some  cases  are  tending 
to  rebound.  Retail  prices  of  these  basic  products  and  of 
commodities  manufactured  from  them  have  fallen  steadily 
in  the  last  year  and  in  the  last  six  months,  but  the  rate 
of  decline  has  not  been  commensurate  with  that  of  the 
prices  paid  to  the  farmers. 


Credits. 

Throughout  the  country  the  demand  for  short-time 
credits  has  decreased  in  the  last  year  and  in  the  last  six 
months.  This  lessened  demand  is  ascribed  in  reports 
received  in  this  survey  to  two  causes : 

First,  the  lessened  volume  of  business;  and 

Second,  the  increase  in  the  value  of  the  dollar. 

The  volume  of  credits  carried  by  the  banks  of  the 
country,  both  liquid  and  non-liquid,  still  is  greater  than 
normal,  but  has  declined  steadily  during  the  last  year 
and  during  the  last  six  months.  The  volume  of  "frozen 
credits"  in  the  country  as  a  whole  has  decreased  sub- 
stantially in  the  last  six  months,  although  the  reduction 
in  agricultural,  metal  mining  and  livestock  regions  has 
not  been  as  great  as  that  in  the  industrial  districts,  and 
"frozen  credits"  growing  out  of  export  loans  have  been 
reduced  very  little. 

Credits  that  remain  non-liquid  consist  chiefly  of  those 
extended  before  1920  and  believed,  at  the  time  they  were 
extended,  to  be  liquid.  Sharp  depressions  in  some  lines, 
however,  have  "frozen"  credits  that  were  extended  this 
year. 

Exports  of  finished  goods,  taken  as  a  whole,  have 
declined  steadily  throughout  the  year.  Very  recently 
exports  of  cotton  and  certain  other  agricultural  products 
have  taken  an  upward  turn. 

The   Nation's   Business. 

That  is  the  picture  of  our  situation  today,  drawn  along 
national  lines.  To  take  the  place  of  the  chart  that 
accompanied  the  first  Economic  Survey,  I  have  prepared 
and  appended  to  this  report  brief  summaries  of  condi- 
tions in  each  of  the  states  from  which  reports  were  re- 
ceived. Broadly,  this  is  what  the  reports  show: 

In  the  great  cotton  states  of  the  South,  in  the  agri- 
cultural states  of  the  Middle  West  and  the  West,  in  the 
Western  mining  and  cattle-raising  states,  in  the  lumber 
producing  regions  of  the  Northwest  and  the  Southeast, 
there  has  been  a  great  reduction  in  buying  power  conse- 
quent upon  a  slackened  demand  for  natural  products  and 
a  reduction  in  their  value  without  a  commensurate  de- 
crease in  the  prices  of  finished  goods. 

In  the  industrial  regions  of  New  England,  the  Middle 
Atlantic  states  and  the  tier  of  states  extending  from  the 
Atlantic  Ocean  to  the  Great  Lakes  and  the  Mississippi 
River  there  has  been  a  reduction  of  production  conse- 


quent  upon  reduced  foreign  purchasing  and  reduced  buy- 
ing by  producers  of  natural  products  at  home. 

This  reduction  in  the  output  of  manufactured  goods  in 
the  industrial  centers  has  thrown  millions  of  men  out  of 
employment  and  consequently  has  operated  to  reduce 
further  the  national  buying  power.  Thus  increased  con- 
sumption of  natural  products  is  prevented,  increased  pur- 
chasing by  producers  of  natural  products  is  prevented, 
increased  production  of  finished  goods  is  prevented,  in- 
creased employment  of  labor  is  prevented,  and  the  circle 
revolves. 

Jones,  the  farmer,  millions  strong,  is  not  getting  enough 
for  his  crops  to  enable  him  to  buy  the  farm  implements 
and  clothes  and  shoes  and  other  finished  goods  that  he 
and  his  family  need  and  normally  consume.  Brown,  the 
cattle  man,  and  Smith,  the  miner,  are  in  the  same  fix. 
Green,  the  manufacturer,  cannot  sell  the  quantity  of  goods 
he  normally  produces,  so  he  has  cut  down  production. 
And  White,  the  laborer,  is  out  of  work  and  cannot  buy 
either  the  farm  products  or  the  finished  goods  that  he  and 
his  family  normally  use. 

Changed   Problems. 

What  has  caused  this  situation?  To  understand  it 
clearly  it  is  well  to  consider  briefly  the  development  of 
production  and  consumption  and  marketing  in  the  United 
States  since  the  nation's  birth. 

We  have  a  country  that  in  one  hundred  and  fifty  years 
has  spread  from  thirteen  colonies  crowded  together  on  the 
Atlantic  seaboard  until  now  it  stretches  broadly  across  a 
great  continent,  possessed  of  great  natural  wealth,  a  highly 
developed  industrial  structure,  and  one  hundred  and  five 
millions  of  highly  intelligent  people. 

Steadily  for  one  hundred  and  fifty  years  the  United 
States  has  expanded,  territorially,  industrially,  economic- 
ally. Except  for  the  South  in  the  years  after  the  Civil 
War,  every  part  of  the  country  has  developed  steadily, 
increasing  its  productivity,  increasing  its  marketing  facili- 
ties, increasing  its  common  prosperity  from  year  to  year. 
Farms  have  grown  out  of  the  wilderness.  Towns  have 
sprung  into  cities  and  great  industrial  centers.  Railroads 
have  been  built  across  the  country  and  up  and  down. 
Products  of  one  part  of  the  country  have  been  traded  for 
those  of  other  parts  and  for  foreign  products  in  an  intricate 
system  of  exchange  that,  for  all  its  complexity,  and  for 
all  the  factors  of  finance  and  transportation  and  marketing 


and  production  that  were  involved  in  it,  in  normal  times 
operated  exceedingly  smoothly. 

True,  the  progress  of  prosperity  has  been  halted  at 
times.  We  had  our  period  of  readjustment  after  the  Civil 
War.  We  have  had  poor  crop  years,  followed  by  financial 
stringencies  and  temporary  business  depression.  We  had 
the  period  of  railroad  receiverships.  Several  times  some 
parts  of  our  economic  machine  have  broken,  and  we  have 
had  to  stop  to  repair  them. 

But  on  the  whole,  before  the  great  war,  the  country 
moved  steadily  forward,  unperplexed  by  any  except  in- 
ternal problems,  producing  more  and  more  each  year, 
always  trading  products  for  one  another  at  home  and 
abroad,  and  never  concerned  very  much  with  foreign 
affairs  that  had  no  direct  effect  on  the  United  States. 

We  continued  along  this  line  until  the  great  war  broke 
out.  Then  the  world  began  to  call  on  this  country  to  take 
a  larger  part  in  world  production  and  a  larger  part  in 
world  affairs.  New  conditions  changed  the  old  ways  for 
all  time.  Our  country  has  become  the  great  creditor 
nation  of  the  world,  the  reservoir  of  the  world's  gold  and 
the  world's  credit  ability.  Our  problems  are  no  longer 
merely  problems  caused  by  bad  weather  and  poor  crops 
and  domestic  financial  stringencies.  They  are  international 
and  world  problems. 

If  world  influences  in  the  process  of  readjustment 
could  be  divorced  from  domestic  influences  this  country 
would  not  now  be  considering  the  problems  of  readjust- 
ment; it  would  have  solved  them  and  would  be  walking 
in  the  old  path.  But  this  could  not  and  cannot  be;  world 
influences  now  and  henceforth  must  have  a  powerful  bear- 
ing even  on  the  problems  that  in  former  years  were 
considered  purely  domestic. 

Fundamental  Principles. 

Intelligent  study  and  discussion  of  conditions  in  our 
country  today  must  be  based  upon  full  recognition  of 
these  fundamental  principles: 

;  First :  The  world  is  recovering  from  the  most  serious 
and  far-reaching  economic  and  social  upheaval  in  modern 
times,  and  the  most  essential  element  in  the  restoration  of 
stable  conditions  is  time. 

1 Second:  The  United  States  is  economically  so  inter- 
dependent with  the  rest  of  the  world  that  it  cannot  have 
full  and  permanent  prosperity  without  world  prosperity. 
Third:  While  time  is  the  most  essential  element  in 
the  restoration  of  normal  conditions,  it  lies  within  the 

10 


power  of  men  and  governments  to  assist  the  operation  of 
natural  economic  forces  working  toward  readjustment  by 
removing  artificial  obstructions  from  their  path  and  by  so 
conducting  their  affairs  that  they  move  with  those  forces 
instead  of  vainly  trying  to  oppose  them. 

Fourth :  The  power  of  one  man  or  one  small  group  of 
men  to  aid  the  curative  work  of  natural  economic  forces 
is  small ;  if  the  full  power  of  men  to  improve  conditions 
is  to  be  exercised  it  must  be  through  the  awakening  of  a 
universal  economic  consciousness  and  through  actions 
guided  by  that  consciousness. 

Fifth :  There  is  no  panacea  for  the  economic  ills  of 
the  time,  nor  can  artificial  measures  hasten  the  restoration 
of  normal  conditions. 

[_Sixth :  Delay  in  the  removal  of  legislative  restrictions 
on  business  that  may  have  been  necessary  in  time  of  war, 
but  serve  now  only  to  hamper  and  to  harass,  is  preventing 
the  operation  of  natural  economic  laws  that  are  working 
to  restore  stable  conditions. 

[Seventh :  The  natural  functioning  of  natural  laws,  and 
not  artificial  legislation,  will  remedy  business  conditions. 
Legislation  that  seeks  to  bolster  any  element  in  our 
economic  structure  by  artificial  means,  or  is  prompted  by 
political  exigency  rather  than  by  economic  requirement, 
cannot  improve  the  situation,  but  in  the  long  run  must 
result  harmfully. 

Eighth :  The  "normal  conditions"  toward  which  the 
country  is  progressing  are  not  necessarily  the  same  as 
those  that  existed  before  the  war. 

Three  Prerequisites  of  Stability. 

In  the  light  of  these  principles  should  be  considered  the 
three  principal  prerequisites  of  stability  and  prosperity,  as 
they  have  been  clearly  recognized  and  forcefully  stated  by 
the  men  whose  opinions  have  been  consolidated  in  this 
survey : 

First:  There  must  be  re-established  such  a  harmonious 
relationship  between  prices  and  costs,  and  between  prices 
of  natural  products  on  one  hand  and  finished  goods  and 
services  on  the  other,  as  will  give  to  each  group  of  pro- 
ducers the  purchasing  power — which  means  simply  the 
ability  to  trade — to  which  its  product  is  naturally  entitled. 

Second :  There  must  be  a  restoration  of  social,  finan- 
cial and  economic  order  and  stability  in  the  nations  of  the 
old  world  that  were  disrupted  by  the  war.  They  must 
reconstruct  their  productive  machinery  and  restore  the 
wealth  that  was  wasted  and  destroyed  in  the  war,  so  that 

11 


the  normal  exchange  of  products  of  one  country  for  those 
of  another — the  normal  international  trade  relations — may 
be  resumed. 

Third:  When  economic,  financial  and  social  stability 
abroad  shall  have  been  restored,  the  United  States  must 
find  in  those  stabilized  foreign  countries  markets  for  the 
excess  products  of  her  farms  and  her  forests,  her  mines 
and  her  factories. 

The  simple  fact  is  that  the  farmers  and  other  producers 
of  raw  materials  do  not  receive  enough  for  their  products 
to  enable  them  to  buy,  at  prevailing  prices  of  manufactured 
goods,  the  finished  products  that  they  need  and  normally 
buy.  In  other  words,  the  reduction  in  the  price  of  fin- 
ished goods  has  not  been  commensurate  with  the  decline 
in  the  price  of  natural  products,  and  the  purchasing  power 
of  the  farmer,  the  miner,  the  livestock  man  and  the  lumber 
producer  therefore  has  been  greatly  reduced. 

Domestic  Problems. 

This  survey  has  shown  that  the  movement  toward  a 
proper  and  equitable  relationship  between  the  prices  of 
natural  products  and  finished  goods,  while  slow  'and  in 
some  cases  erratic,  nevertheless  on  the  whole  has  pro- 
ceeded steadily  during  the  last  year,  and  at  an  accelerated 
rate  during  the  last  six  months.  The  reports  that  I  have 
received  have  also  shown  that  the  three  great  domestic 
influences  that  more  than  all  others  are  retarding  this 
readjustment  of  prices  and  costs  are  these : 

First:  The  delayed  adjustment  of  the  cost  of  labor, 
which  prevents  adequate  reduction  of  the  prices  of  the 
innumerable  commodities  and  services  in  the  cost  of  which 
the  cost  of  labor  is  the  most  important  factor,  and  also 
serves  to  prevent  full  employment  of  labor.  This  is  due 
both  to  slow  adjustment  of  the  compensation  of  labor  and 
to  the  continuation  of  shop  rules  that  impair  its  efficiency. 

Second :  The  sustained  high  costs  of  transportation, 
which  prevent  the  natural  and  normal  movement  of  com- 
modities of  all  kinds  to  market  and  operate  to  reduce  the 
net  return  for  natural  products  at  the  same  time  that  they 
increase  the  costs  and  therefore  the  prices  of  finished 
goods. 

Third :  The  continuation  of  an  unsound  system  of  tax- 
ation that  diverts  working  capital  from  its  proper  channels 
and  thereby  prevents  the  accumulation  of  working  capital 
that  is  necessary  for  increased  production,  for  the  installa- 
tion of  improved  methods  of  production,  and  for  full  em- 
ployment of  labor. 

12 


Common  opinion,  as  it  is  expressed  in  the  hundreds  of 
reports  that  make  up  this  survey,  is  that  when  these  three 
deterrent  influences  have  been  eliminated  the  chief  ob- 
stacles to  a  restoration  of  a  proper  and  equitable  price 
equilibrium  will  have  been  removed,  trading  between  one 
group  of  producers  and  the  others  will  proceed  naturally, 
and  labor  and  capital  will  be  more  fully  employed  in  pro- 
ductive enterprise. 

The  Railway  Situation. 

Whenever  men  get  together  and  discuss  the  railway 
situation,  the  question  most  frequently  asked  is  this: 
"When  are  railroad  rates  going  to  come  down?" 

Instead  of  that  question,  these  might  better  be  asked: 

"When  is  the  Government  going  to  recognize  the  im- 
portance of  making  the  financial  settlements  to  which  the 
railways  are  entitled? 

"When  is  the  policy  of  'less  Government  in  business' 
going  to  be  applied  to  the  railways,  which  have  suffered 
more  than  any  other  industry  from  the  effects  of  too  much 
Government  in  business? 

"When  are  the  labor  costs  that  are  the  most  important 
factor  in  the  costs  of  railway  operation  going  to  be  ad- 
justed to  a  point  in  keeping  with  the  common  reduction 
in  values  of  services,  and  when  are  shop  rules  that  prevent 
railway  employes  from  giving  full  value  for  their  wages 
going  to  be  eliminated?" 

Upon  the  answers  to  these  last  three  questions  depends 
the  answer  to  the  first.  As  long  as  the  Government  delays 
the  enactment  of  the  railway  relief  legislation  that  com- 
mon sense  demands;  just  as  long  as  the  Government  con- 
tinues to  control  the  operations  of  the  railways  in  vital 
respects,  and  just  as  long  as  the  cost  of  railway  labor 
remains  out  of  line  with  the  common  price  tendency — just 
so  long  will  it  be  before  railroad  rates  come  down. 

In  effect,  this  is  what  the  Government  said  when  it 
took  over  the  railways: 

"The  exigencies  of  war  require  that  control  of  your 
properties  be  centralized  in  the  Government.  The  Inter- 
state Commerce  Commission  says  they  are  worth  $18,900,- 
000,000.  Your  average  earnings  in  the  last  three  years 
have  been  $900,000,000  a  year,  and  we  shall  guarantee  to 
you  an  annual  return  of  that  amount.  The  managers 
whom  we  place  in  control  of  your  properties  will  see  that 
they  are  properly  maintained.  From  time  to  time  we  may 
find  it  necessary  or  desirable  to  make  certain  additions  or 
betterments,  and  we  shall  do  so  at  your  expense.  When 

13 


the  time  comes  we  will  do  the  fair  thing  in  the  way  of 
adjustments." 

That  was  the  understanding.  The  Government  owes 
the  roads  hundreds  of  millions  of  dollars,  and  Congress  is 
hesitating  about  paying  the  debt.  The  roads  owe  the 
Government  millions  of  dollars  on  account  of  additions 
and  betterments  made  during  the  period  of  Federal  con- 
trol, and  in  some  quarters  there  is  apparent  a  desire,  based 
on  the  assumption  that  capital  expenditures  should 
be  absorbed  by  current  income,  to  offset  the  debt 
of  the  roads  to  the  Government  against  the  Government's 
debt  to  the  roads. 

The  effects  of  withholding  the  payments  to  which  the 
railways  are  entitled  are  manifest.  Many  roads  are  forced 
to  borrow  at  high  rates  of  interest  to  meet  their  current 
expenses ;  others  must  purchase  supplies  and  equipment  on 
credit  extended  by  the  manufacturers,  and  very  few  have 
been  able  to  accumulate  a  sufficient  surplus  of  working 
capital  to  make  necessary  repairs  and  replacements. 

The  result  has  been  unnecessarily  to  tie  up  huge 
amounts  of  credits  at  a  time  when  the  banks  of  the  coun- 
try and  business  generally  can  ill  afford  to  carry  such  an 
additional  burden.  It  has  made  it  impossible  for  the  roads 
to  make  needed  repairs,  and  has  deprived  thousands  of 
men  of  employment.  There  can  be  no  doubt  that  the 
employment  of  these  men  at  this  time  would  give  an 
impetus  to  business  that  would  be  reflected  in  greater 
consumption,  greater  production,  and  a  greater  volume  of 
railway  traffic.  And  it  has  been  the  experience  of  rail- 
roading in  this  country  that  when  the  volume  of  traffic 
increases  rates  decrease. 

Railway  Wages. 

And  while  it  has  delayed  paying  its  debts  to  the  rail- 
ways, the  Government  has  continued  to  impose  many 
restrictions  that  take  away  from  the  railway  management 
the  freedom  of  action  that  is  necessary  for  efficient  opera- 
tion of  any  business.  When  the  Government  turned  back 
the  railways  to  their  owners  it  handed  to  them  also  the 
burden  of  enormous  wage  increases  that  had  been  made 
during  the  period  of  Federal  operation.  The  Government 
retained  the  Railroad  Labor  Board,  a  cost-determining 
agency  entirely  divorced  from  the  Interstate  Commerce 
Commission,  the  rate-fixing  body. 

After  steadily  rising  for  several  years,  railway  wages 
were  reduced  12  per  cent  last  July.  Compared  with  the 
decrease  in  the  value  of  the  commodities  that  the  roads 

14 


carry,  that  decrease  is  very  small,  and  does  not  permit  the 
reduction  of  rates  to  a  point  in  keeping  with  the  lower 
level  of  other  services  and  commodities. 

The  common  depression  of  trade,  of  which  railway 
rates  are  one  of  the  causes,  has  reduced  the  volume  of 
railway  traffic  so  considerably  that  a  short  time  ago  25  to 
30  per  cent  of  railway  workers  were  out  of  employment. 
As  the  element  in  purchasing  power  is  total  wages  and 
not  rates  of  wages,  railway  employes  have  therefore 
already  suffered  the  reduction  in  purchasing  power  which 
they  have  been  resisting. 

What  is  true  of  railroad  labor  is  true  also  of  labor  as  a 
whole.  Attempts  to  maintain  wage  scales  based  on  prices 
and  values  that  no  longer  exist  cannot  be  permanently  suc- 
cessful, but  while  they  continue  they  cannot  do  otherwise 
than  work  injury  to  industry,  to  a  very  large  part  of  the 
employes  themselves,  and  to  the  entire  public. 

Compensation   of  Labor. 

I  have  received  reports  in  this  survey  of  groups  of 
workmen  that  have  recognized  that  their  full  employment 
depended  upon  reasonable  compensation  for  their  labor 
and  have  voluntarily  accepted  wage  reductions.  This  is 
true  notably  of  farm  labor,  of  workmen  in  the  metal 
mines,  and  in  some  instances  of  men  in  manufacturing 
industries,  who  have  either  accepted  wage  cuts  or  have 
agreed  voluntarily  to  work  longer  hours  for  the  same 
wage  per  day. 

The  common  tendency,  however,  has  been  to  resist 
wage  reductions,  and  it  has  been  based  on  a  natural  un- 
willingness to  relinquish  the  "higher  standard  of  living" 
that  inflated  wages  are  supposed  to  have  established,  and 
on  the  argument  that  the  cost  of  living  must  come  down 
before  wage  rates  can  come  down. 

With  regard  to  the  first  point,  the  position  of  labor  is 
fundamentally  the  same  as  that  which  for  a  long  time 
prompted  some  farmers  to  withhold  their  crops  from 
market  because  they  believed  prices  would  recover.  It 
is  the  same  as  the  reasoning  that  made  some  retailers  and 
some  manufacturers  resist  for  many  months  the  demand 
for  lower  prices. 

When  those  farmers  found  they  could  not  sell  at  the 
prices  they  wanted,  they  sold  at  the  prices  they  could  get ; 
to  a  lesser  degree  the  manufacturers  and  retailers  marked 
down  their  prices  to  a  point  nearer  to  that  which  the 
public  was  able  to  pay.  So  it  must  naturally  be  with 
labor. 

15 


It  is  becoming  more  and  more  evident  to  labor,  as 
well  as  to  the  public  in  general,  that  labor  cannot  find 
full  employment  at  the  wages  it  wants,  and  must  accept 
work  at  a  wage  proportionate  to  the  value  of  the  goods 
it  produces  and  in  keeping  with  the  average  level  of 
values. 

Wages  are  an  integral  and  inseparable  factor  in  the 
cost  of  living,  and  both  the  common  good  and  economic 
law  require  that  they  come  down  together.  Labor 
occupies  the  dual  position  of  producer  and  consumer,  and 
disproportionate  rates  of  wages  therefore  have  a  double 
effect  upon  labor  itself: 

First:  They  are  a  factor  in  causing  unemployment, 
and  thereby  reduce  the  consuming  power  of  a  large  part 
of  labor. 

Second:  They  keep  up  the  prices  of  finished  goods, 
and  thereby  reduce  the  purchasing  power  of  all  labor, 
employed  or  unemployed. 

A  general  reduction  in  so  important  a  factor  in  the 
costs  of  production  as  the  wages  of  labor  could  not  fail 
to  bring  about  a  corresponding  decline  in  the  costs  of 
manufactured  goods.  The  purchasing  power  of  the  farm- 
ers would  be  increased,  workmen  would  find  more  employ- 
ment, the  cost  of  living  would  come  down,  and  all  business 
would  receive  an  impetus  that  would  carry  us  far  toward 
normal  conditions.  Labor's  standard  of  living  would  not 
be  impaired. 

A  notable  example  of  the  effects  of  disproportionately 
high  rates  of  wages  is  found  in  the  building  situation.  A 
shortage  of  hundreds  of  thousands  of  homes  exists  in  the 
United  States.  For  social  as  well  as  economic  reasons 
relief  from  this  shortage  is  necessary,  but  in  spite  of  this 
great  need  for  new  dwellings  and  in  spite  of  the  readiness 
of  hundreds  of  thousands  of  persons  to  build  houses  as 
soon  as  the  cost  of  construction  resumes  its  proper  rela- 
tionship to  other  values  and  prices,  a  large  percentage  of 
workmen  in  the  building  trades  remain  idle  rather  than 
accept  a  reduction  in  the  wage  rate. 

Wage  rates  are  of  course  not  the  only  factors  that 
require  adjustment.  Shop  rules  that  impair  the  efficiency 
of  labor  by  restricting  its  output  and  increase  the  cost  of 
production  in  industry  are  an  important  influence  working 
to  keep  up  the  prices  of  finished  goods. 

The  Excess  Profits  Tax. 

The  hundreds  of  well-informed  and  experienced  men 
throughout  the  country  whose  opinions  I  asked  in  prepar- 

16 


ing  the  First  Economic  Survey  that  was  made  last  spring 
were  almost  unanimous  in  their  condemnation  of  the 
excess  profits  tax,  and  in  this  Second  Survey  it  has  been 
shown  that  as  the  disastrous  effects  of  the  tax  have  been 
more  and  more  widely  felt  the  protest  against  its  continu- 
ation is  even  more  emphatic. 

It  is  difficult  to  understand  why,  for  the  sake  of  raising 
a  relatively  small  amount  of  revenue,  Congress  should 
disregard  a  promise  that  amounted  almost  to  a  party 
pledge,  the  recommendations  of  the  President  and  the 
Secretary  of  the  Treasury  and  the  demands  of  public 
opinion,  and  consider  legislation  that  would  continue  this 
universally  harmful  tax  a  year  longer  than  is  necessary. 

The  tax  is  actually  not  a  tax  on  prcrfits,  but  a  confisca- 
tion of  working  capital.  It  is  apparent  to  everyone  who 
has  observed  its  operation  that  it  impairs  the  working 
capital  of  the  country  and  makes  impossible  that  full 
development  of  productive  enterprise  which  is  essential  to 
reasonable  and  equitable  prices  and  full  employment  of 
labor. 

The  tax  helps  to  maintain  the  higher  cost  of  finished 
products  as  compared  with  those  of  farm  products  and 
raw  materials.  It  restricts  the  volume  of  manufactured 
goods  that  can  profitably  be  made  and  sold,  and  therefore 
it  becomes  another  very  potent  cause  of  unemployment. 

These  three  great  obstacles  to  readjustment — the  rail- 
way situation,  the  slow  adjustment  of  the  compensation 
of  labor  and  the  continued  enforcement  of  shop  rules  that 
impair  its  efficiency,  and  the  continuation  of  the  excess 
profits  tax — vary  in  importance,  but  the  injury  they  work 
is  so  widespread  and  they  are  so  alike  in  their  manifesta- 
tions that  a  discussion  of  the  effects  of  one  parallels  to  a 
large  extent  a  discussion  of  the  effects  of  the  others. 

Progress  of  Readjustment. 

But  in  spite  of  these  problems  the  process  of  readjust- 
ment is  going  on,  and  there  have  been  undeniable  signs 
of  at  least  a  modicum  of  improvement  in  the  last  few 
months.  Domestically,  we  are  setting  our  house  in  order 
and  approaching  the  day  when  the  restoration  of  normal 
consuming  power  shall  carry  with  it  a  return  of  normal 
production,  normal  consumption  and  full  employment  of 
labor. 

The  people  of  the  United  States  need  food,  fuel,  cloth- 
ing, shelter,  transportation,  and  many  other  commodities 
and  services  that,  with  the  social  development  of  the 
population,  have  come  to  be  necessaries  of  life.  It  would 

17 


be  fantastic  to  assume  that  the  maladjustments  resulting 
from  the  war  would  permanently  lower  the  consuming 
power  of  the  people  and  the  demand  for  these  necessaries. 
Every  step  in  the  process  of  readjustment  is  doing  its  bit 
to  restore  the  normal  volume  of  purchasing  power  to  the 
entire  people,  and  in  the  nature  of  things  there  is  no  room 
for  anything  but  confidence  in  the  gradual  improvement  of 
business. 

In  the  extent  of  its  recovery  from  the  world-wide 
stagnation  that  grew  out  of  the  waste  and  destruction  of 
wrar  the  United  States  has  fared  better  than  any  other 
belligerent  nation.  It  is  free  from  the  social  disturbances 
that  stand  in  the  way  of  restoration  of  stability  in  many 
other  countries.  Its  money  has  escaped  the  demoralizing 
depreciation  that  the  currencies  of  other  nations  have 
suffered.  Despite  its  own  indebtedness  it  has  become  pre- 
eminently the  creditor  nation  of  the  world,  while  other 
countries  have  accumulated  huge  national  debts.  Its  loss 
of  man  power  resulting  from  the  war  has  been  small  as 
compared  to  the  losses  of  other  nations.  There  is  room 
within  its  borders  for  a  greatly  increased  population  and 
there  are  almost  unlimited  sources  of  wealth  to  support 
that  population. 

World  Conditions  and  Our  Production. 

The  United  States  is  fortunate  in  the  rapidity  of  its 
recovery,  but  at  the  same  time  it  is  unfortunate  in  the 
comparative  slowness  of  the  recovery  of  other  nations. 
The  enhanced  value  of  the  dollar  abroad  may  be  a  matter 
for  pride,  but  it  is  also  an  influence  that  makes  it  impos- 
sible for  the  war-stricken  foreign  countries  that  are 
struggling  to  restore  their  full  productive  powers  to  buy 
and  to  pay  for  the  quantities  of  American  raw  materials 
and  finished  goods  which  they  naturally  would  absorb. 

Reports  received  in  this  survey  show  that  as  surplus 
stocks  of  necessaries  abroad  are  consumed,  as  European 
conditions  gradually  improve,  and  as  readjustment  at 
home  proceeds,  the  value  of  exports  of  foodstuffs  and 
cotton  is  gradually  increasing,  and  the  partial  restoration 
of  foreign  markets  undoubtedly  has  been  a  very  potent 
force  in  checking  the  decline  of  the  prices  of  natural 
products. 

It  has  reacted  to  improve  somewhat  the  condition  of 
the  farmer,  helping  him  to  liquidate  his  products,  and  so 
has  been  an  influence  tending  to  work  an  improvement  in 
business  as  a  whole.  The  effect  of  the  increase  in  the 
volume  of  exports  of  foodstuffs  illustrates  very  well  the 

18 


importance  of  foreign  markets  and  their  influence  on 
domestic  prosperity. 

The  United  States  produces  more  than  it  consumes, 
and  it  is  essential  to  our  full  prosperity  that  our  excess 
production  be  absorbed  in  the  markets  of  the  world.  And 
upon  the  United  States,  as  the  pre-eminent  creditor  nation 
of  the  world,  rests  a  large  part  of  the  responsibility  for 
creating  financial  machinery  that  will  help  to  restore 
foreign  markets  for  our  goods. 

There  is  nothing  in  either  the  domestic  or  the  foreign 
situation  to  give  rise  to  the  pessimistic  conclusion  that 
the  world  is  riding  straight  to  ruin.  Rational  examination 
of  our  condition  today  must  prove  to  the  greatest  doubter 
that  our  problems  are  but  the  natural  manifestations  of  a 
world-wide  maladjustment  that  great  natural  forces  are 
working  to  remedy. 

We  can  serve  our  interest  best  if,  instead  of  cowering 
in  pessimistic  fear  or  going  to  the  other  extreme  and 
preaching  that  everything  will  be  all  right  if  we  think  it 
is  all  right,  we  recognize  the  facts,  face  them  honestly 
and  courageously,  and  consider  how  we  may  best  support 
the  forces  that  are  operating  to  restore  stable  conditions. 

False  Gods. 

Three  influences  whose  effects  have  become  more 
pronounced  in  the  last  year  have  served  more  than  all 
others  to  obscure  the  facts,  and,  by  obscuring  them,  to 
prevent  the  proper  functioning  of  that  intelligent,  united, 
co-operative  effort  that  is  necessary  to  be  made  by  the 
American  people  if  we  are  going  to  exercise  our  full 
power  to  help  in  the  solution  of  our  problems. 

The  first  is  the  mistaken  idea  that  the  process  of 
readjustment  is  a  struggle  between  groups  of  producers, 
and  that  each  group  is  capable  of  improving  its  own  condi- 
tion at  the  expense  of  the  others  and  is  striving  to  attain 
prosperity  by  keeping  the  other  fellow  down. 

The  second  is  the  mistaken  idea  that  legislation  can 
deflect  the  operation  of  economic  laws  so  as  to  benefit 
particular  groups,  and  the  tendency  to  let  the  enactment 
of  legislation  be  guided  by  political  expediency  rather 
than  by  sound  economic  requirements. 

The  third  is  the  tendency  to  coin  slogans  and  catch- 
phrases  and  to  substitute  them  for  sound  reasoning, 
preaching  that  they  describe  economic  conditions  and 
pretending  that  they  express  fundamental  economic  forces 
and  movements  which  in  the  nature  of  things  they  cannot 
express.  These  slogans  serve  only  to  obscure  the  vision 

19 


and  befog  the  reason,  and  their  effects  are  evident  in 
antagonisms  between  producing  groups  that  in  the  end 
can  only  work  to  the  common  injury. 

"Buyers'  strike"  has  been  a  catch-phrase  of  the  year. 
It  is  popularly  understood  to  mean  that  millions  of  people 
in  the  United  States  are  showing  their  displeasure  at  re- 
tailers by  refusing  to  buy,  designing  to  force  prices  down 
by  their  refusal  to  purchase  commodities  that  they  need. 
It  is  as  if  some  pervasive  power  had  suddenly  acted  upon 
the  minds  of  millions  of  people,  customers  of  retail  stores, 
and  directed  them  not  to  buy. 

Of  course  the  phenomenon  that  resulted  in  reduced 
purchasing  was  not  a  "buyers'  strike"  in  any  way.  It  was 
not  that  the  people  did  not  want  to  buy;  it  was  simply 
that  war-time  prosperity  was  at  an  end,  values  were  being 
reduced,  and  people  did  not  have  the  money  to  buy. 
Nevertheless  the  phrase  "buyers'  strike"  could  not  fail  to 
create  a  certain  mistrust  of  and  antagonism  to  retailers  as 
a  group  and  the  retailers  themselves  could  not  help  looking 
for  the  mysterious  power  that  had  caused  the  supposed 
"strike."  The  natural  tendency  to  personify  forces  made 
the  retailers  believe  some  powerful  "they"  had  caused  it. 
And  not  long  ago  some  of  them  discovered  who  "they" 
were;  and  in  national  publicity  charged  that  the  banks 
had  advised  the  people  not  to  buy! 

Thus  the  wide  and  thoughtless,  not  to  say  malicious, 
use  of  one  little  phrase  has  created  at  least  a  measure  of 
antagonism  in  and  toward  three  groups — the  retailers,  the 
banks  and  the  entire  consuming  public. 

We  need  look  no  farther  than  the  halls  of  Congress 
for  illustrations  of  the  mistaken  ideas  that  this  is  a 
struggle  between  groups  and  that  legislation  can  change 
the  course  of  economic  laws  so  as  to  help  one  class  at 
the  same  time  as  it  injures  others. 

Intelligent  and  informed  public  opinion  is  aware  of  the 
widespread  harm  that  is  done  by  the  continuation  of  the 
excess  profits  tax.  The  President  is  aware  of  it,  the 
Secretary  of  the  Treasury  is  aware  of  it,  and  experts  in 
the  Treasury  Department  are  aware  of  it.  And  public 
opinion  and  official  advice  demanded  the  retroactive  repeal 
of  the  tax,  so  that  its  harmful  effects  might  end  with  the 
year  1921,  and  not  go  on  through  the  year  1922. 

Uneconomic  Legislation  and  Its  Effect. 

There  exists  in  Congress,  however,  a  group  known  as 
"the  agricultural  bloc."  It  was  organized  to  serve  the 
best  interests  of  the  farmer.  This  bloc  is  convinced,  or 

20 


at  least  asserts  it  is  convinced,  that  the  excess  profits  tax 
is  a  just  tax  that  places  upon  corporations  their  proper 
share  of  the  tax  burden;  that  it  does  not  hurt  anybody  in 
particular  or  business  in  general,  and  that  efforts  to  re- 
peal it  are  an  attempt  to  "put  one  over"  on  the  farmer 
whose  interests  it  is  the  bloc's  purpose  to  guard. 

The  agricultural  bloc  has  turned  deaf  ears  to  the 
arguments  that  the  excess  profits  tax  actually  is  not  a 
tax  at  all,  but  a  confiscation  of  working  capital ;  that  by 
impairing  capital  it  prevents  that  full  development  of 
productive  enterprise  which  is  essential  to  reasonable  and 
equitable  prices  of  manufactured  goods  and  to  full  em- 
ployment of  labor;  that  by  keeping  up  the  costs  of 
production  of  manufactured  goods  it  is  restricting  the 
purchasing  power  of  the  farmers;  that  by  restricting  the 
purchasing  power  of  the  farmers  it  is  restricting  the 
volume  of  finished  goods  that  profitably  can  be  made  and 
sold ;  that  by  restricting  manufacturing  it  is  restricting 
employment-;  and  that  by  restricting  employment  it  is 
restricting  the  markets  for  the  farmer's  products. 

These  arguments  have  been  iterated  and  reiterated  until 
all  the  members  of  the  agricultural  bloc  must  be  aware  of 
them,  and  they  have  not  been  controverted.  There  were, 
indeed,  members  of  the  Senate  and  House  committees  that 
considered  the  tax  bill  who  favored  the  repeal  of  the 
excess  profits  tax  so  as  to  make  it  effective  as  of  January 
1,  1921.  But  "to  prevent  friction  in  the  ranks,"  to  use  the 
words  of  a  member  of  the  Senate  committee,  the  com- 
mittee gave  way  to  the  House  and  to  the  agricultural 
bloc,  and  has  recommended  that  a  measure  that  must  re- 
sult in  the  infliction  of  higher  prices  for  finished  goods, 
reduced  purchasing  power  for  the  farmer,  and  a  restricted 
market  for  farm  products  be  continued  for  a  year  longer 
than  is  necessary.  Thus,  if  the  tax  is  continued  another 
year,  the  agricultural  bloc  will  have  defeated  the  very 
purpose  for  which  it  was  formed. 

It  is  acts  and  policies  like  these  that  do  more  than 
anything  else  to  prevent  the  restoration  of  stable  condi- 
tions and  common  prosperity.  It  is  this  pitting  of  produc- 
ing groups  against  groups,  this  following  of  delusive 
standards,  this  shouting  of  misleading  slogans,  that  pre- 
vents the  unified  and  co-operative  effort  of  the  entire 
people  of  the  country  toward  the  common  good. 


21 


Action  Based  On  the  Facts. 

In  this  survey  I  have  tried  to  give  you  the  facts  as  I 
have  learned  them  from  the  reports  of  bankers  and  others 
in  all  parts  of  the  country  who  are  in  close  touch  with 
business  of  all  kinds.  I  have  tried  to  picture  the  progress 
of  readjustment  and  to  outline  the  influences  that  are 
retarding  it. 

But  knowledge  of  the  facts  means  nothing  unless  it  is 
made  the  basis  for  action.  And  our  immediate  concern 
should  be  this:  How  can  the  American  Bankers'  Associa- 
tion, with  its  24,000  members  in  thousands  of  communities 
in  the  United  States,  consolidate  its  strength  and  unify 
its  efforts  so  as  to  make  the  banking  system  of  the 
country  an  effective  agent  in  the  restoration  of  normal 
conditions  and  common  prosperity? 

The  intensely  democratic  development  of  the  American 
banking  system  has  been  such  that  we  have  not,  as  they 
have  in  Europe,  a  banking  strength  consolidated  in  a  few 
large  institutions,  each  with  its  branches  spread  among  all 
the  communities  of  the  nation.  Fortunately  or  unfor- 
tunately, the  strength  of  our  banks  does  not  lie  in  the 
hands  of  a  few  men,  capable  by  their  actions  of  exercising 
a  powerful  and  unified  influence  on  financial  and  economic 
affairs  of  the  country. 

We  have  instead  a  banking  system  that  consists  of 
nearly  32,000  independent  units  dotted  over  an  area  of 
more  than  three  million  square  miles  and  operating  under 
half  a  hundred  different  systems  of  banking  laws.  These 
32,000  banks  range  in  strength  from  a  few  thousands  of 
dollars  to  a  billion  dollars,  and  nearly  24,000  of  them, 
representing  fully  90  per  cent  of  the  banking  strength  of 
the  entire  system,  are  included  in  the  American  Bankers' 
Association. 

As  society  has  progressed  through  the  period  of  barter 
to  present-day  systems  of  currency,  credit  and  exchange, 
banking  has  become  a  more  and  more  important  factor  in 
the  economic  life  of  nations,  and  today  it  is  so  fundamental 
a  need  that  without  it  our  whole  economic  structure  would 
break  down. 

Growth  of  Bankers'  Responsibilities. 

The  increasing  importance  of  the  banking  system  has 
carried  with  it  a  corresponding  increase  in  the  public 
responsibilities  of  men  engaged  in  banking.  It  is  no  longer 
sufficient  for  them  to  stand  behind  the  counter  and  make 
loans  and  receive  deposits.  Be  his  bank  a  $50,000  bank 

22 


or  a  $1,000,000  bank  or  a  $1,000,000,000  bank,  be  the  com- 
munity in  which  it  is  situated  ever  so  small  or  ever  so 
large,  every  banker  in  this  country  owes  to  that  com- 
munity a  duty  of  economic  education  and  economic  lead- 
ership that  he  must  discharge  in  his  own  interest  as  well 
as  in  the  public  interest. 

The  question  is,  how  are  we  as  bankers  going  to 
discharge  that  responsibility?  How  are  we  going  to  get 
that  unified  action  that  is  necessary  to  make  the  force  and 
power  of  our  banking  system  fully  effective? 

It  is  not  enough  to  have  32,000  banks  in  widely  sep- 
arated communities  working,  each  alone  and  each  along 
its  own  lines,  ignorant  of  the  thoughts  of  the  thousands  of 
other  bankers,  ignorant  perhaps  of  the  direction  which 
their  efforts  are  taking.  To  become  fully  effective,  the 
latent  power  for  public  good  that  lies  in  the  32,000  bank- 
ing units  must  be  united  in  a  common  policy  and  a 
common  effort  that  will  find  expression  both  in  group 
action  and  individual  action. 

We  have  today  all  the  necessary  media  through  which 
the  banking  strength  of  the  country  may  be  consolidated 
and  made  a  great  force  in  active  economic  leadership. 
We  have  the  American  Bankers'  Association,  in  which 
the  national  strength  of  the  banks  is  represented.  We 
have  the  various  state  associations,  each  with  its  intensive 
machinery  well  equipped  and  ready  for  use  in  creating  a 
union  of  banking  thought  and  action.  We  have  the 
State  Secretaries'  Section,  establishing  a  contact  between 
the  national  organization  and  the  state  organizations 
and  thus  between  all  the  bankers  of  the  country. 

We  have  our  commissions  and  committees,  our  sections 
and  divisions,  our  Executive  Council  meetings  three  times 
a  year  and  our  convention  once  a  year.  All  these  agencies 
are  constantly  giving  careful  consideration  to  the  problems 
that  arise  from  time  to  time  and  to  means  of  solving  them. 
They  can  work  out  policies,  but  they  cannot  put  them  into 
effect.  That  can  be  done  only  by  all  the  banks  of  the 
country. 

The  Bankers'  Opportunities. 

Merely  to  indicate  the  possibilities  that  lie  within  our 
bankers'  associations,  I  want  to  say  that  in  the  last  year  I 
have  three  times  tried  to  make  use  of  the  unified  banking 
strength  of  the  country  in  efforts  of  a  public  character. 
Twice  I  have  called  on  the  banks,  in  connection  with  the 
First  Economic  Survey  and  again  in  connection  with  this 
Second  Survey,  to  provide  accurate  information  from  which 

23 


a  country-wide  picture  of  business  conditions  might  be 
prepared,  so  that  facts  on  which  to  base  action  might  be 
obtained. 

Both  times  the  response  was  instant.  The  banks  of 
the  country,  recognizing  the  effort  of  public  service  that 
was  intended  and  in  which  they  were  asked  to  assist,  gave 
their  best  judgment  and  opinions  in  answers  to  question- 
naires and  in  discussions  of  conditions  in  their  communities. 

Within  the  last  six  weeks  I  have  asked  the  banks  of 
the  country  to  join  in  a  common  effort  to  bring  about  the 
repeal  of  the  disastrous  excess  profits  tax.  The  response 
was  again  instant  and  country-wide,  and  the  unified  bank- 
ing strength  of  the  country  expressed  itself.  Whether  this 
initial  effort  to  consolidate  the  influence  of  the  banks  has 
been  or  will  be  successful  is  immaterial ;  the  point  is  that 
the  banks  have  joined  in  a  public  effort ;  the  way  has  been 
pointed;  an  indication  of  the  possibilities  that  lie  in  union 
of  thought  and  action  has  been  had,  and  we  should  now 
press  forward  to  exercise  the  full  influence  of  our  united 
strength. 

There  has  always  been  in  this  association  an  aversion 
to  going  into  "politics."  If  by  "politics"  is  meant  "par- 
tisan politics,"  of  course  the  aversion  is  well  founded. 
But  in  the  larger  sense  of  the  word,  in  the  sense  of  "the 
science  of  government,"  there  is  no  matter  with  which 
the  banks  of  the  country  might  better  concern  themselves. 

This  great  American  Bankers  Association  should  have 
an  eye  always  not  to  class  welfare,  but  to  the  economic  and 
financial  welfare  of  the  entire  people.  We  should  go  into 
politics  with  the  purpose  of  being  helpful,  of  placing  such 
facts  as  we  may  be  able  to  gather  at  the  disposal  of  legis- 
lative bodies,  and  of  having  them  make  such  use  as  they 
may  wish  of  the  information  we  provide,  for  upon  them 
rest  the  primary  responsibilities  of  government. 

The  banks  can  have  no  greater  duty  than  that  of 
acquainting  the  people  and  the  legislative  bodies  of  the 
country  with  the  facts,  of  guiding  their  own  actions  and 
public  actions  as  far  as  possible  in  the  light  of  sane 
consideration  of  those  facts,  of  dispelling  mistaken  ideas 
that  any  measure  of  prosperity  can  come  to  any  class  out 
of  class  antagonisms,  of  preventing  as  far  as  possible  by 
educational  methods  the  enactment  of  laws  through  polit- 
ical expediency  rather  than  for  sound  economic  reasons. 

And  they  can  discharge  that  duty  best  not  by  sporadic 
individual  action,  but  by  a  community  of  action  through 
the  medium  of  this,  their  great  association. 


24 


Conclusion. 

In  closing,  it  is  well  to  say  that  there  is  nothing  in 
our  domestic  situation  nor  in  the  international  situation 
that  can  sustain  a  pessimistic  outlook  or  a  despondent 
view  that  the  world  has  sunk  into  permanent  depression. 

Gradually  influences  preventing  the  restoration  of  stable 
conditions  are  disappearing.  As  prices  move  toward  sta- 
bility on  an  equitable  basis  the  full  purchasing  power  that 
is  a  necessary  prerequisite  of  normal  prosperity  is  being 
recovered.  Steadily,  as  social  and  political  conditions 
abroad  improve,  the  wealth  wasted  in  war  is  being  replaced 
and  foreign  countries  are  working  to  rebuild  the  productive 
capacity  that  measures  their  ability  to  consume,  and  as 
foreign  production  increases  world  markets  for  American 
goods  are  being  reopened. 

It  is  true  that  many  problems,  both  domestic  and 
foreign,  are  standing  in  the  way  of  a  restoration  of  stable 
conditions  and  normal  domestic  and  world  prosperity. 
But  the  forces  that  are  working  to  solve  these  problems 
are  irresistible. 

If  we  face  conditions  as  they  are;  if  we  consider  our 
situation  in  the  light  of  sound  fundamental  economic 
laws ;  if  we  realize  that  our  problems  are  but  the  natural 
and  necessary  results  of  the  world-wide  disturbances  at- 
tendant upon  the  war;  if  we  recognize  that  time  after  all 
is  the  greatest  healer ;  if  we  do  riot  seek  vainly  to  obstruct 
natural  forces  by  artificial  measures  designed  to  serve  as 
panaceas  or  palliatives;  if  we  as  bankers  and  as  an 
association  use  to  the  fullest  degree  our  power  to  create 
an  enlightened  public  opinion  and  to  awaken  and  direct 
an  economic  consciousness  that  will  wipe  out  producing 
group  antagonisms  and  political  expediencies  and  bring 
the  country  to  work  sanely,  intelligently  and  in  union 
with  the  great  economic  forces  that  are  operating  to  re- 
store normal  conditions  and  normal  prosperity — then  we 
need  not  fear  the  future,  but  may  face  it  confidently 
and  may  be  sure  that  it  holds  no  difficulties  that  we  cannot 
overcome. 


25 


The  Trend  of  Readjustment 

as  reported  by 
The  Banks  of  the  United  States 


The  following  brief  summaries  of  conditions  in  the 
various  states  are  based  upon  answers  to  the  question- 
naire used  in  this  Second  Economic  Survey  and  represent 
the  opinions  and  the  best  judgment  of  the  bankers  and  a 
number  of  men  representative  of  the  industries  of  those 
states,  as  expressed  both  in  the  answers  and  in  the  com- 
ments that  accompanied  them. 

The  statements  contained  in  these  summaries  are  not 
intended  to  be  statistically  exact,  and  no  attempt  has  been 
made  to  use  statistics  compiled  by  various  federal,  state 
and  private  agencies.  Wherever  percentages  are  used 
they  are  approximate,  indicating,  however,  as  close  an 
estimate  as  could  be  obtained  by  the  reporting  bank  after 
careful  observation.  These  reviews  will  accomplish  the 
purpose  for  which  they  are  intended  if  they  present  a 
broad  picture  of  the  trend  of  readjustment  in  the  various 
states. 

The  purpose  in  giving  the  rural  and  urban  popula- 
tion in  each  state  is  to  give  a  definite  idea  of  how  large 
a  part  of  the  population  has  been  primarily  affected  by 
the  reduced  purchasing  power  incident  to  the  common  de- 
cline in  the  value  of  natural  products. 

Irregular  changes  in  values  have  made  it  impossible 
to  determine  exactly  the  relative  financial  importance  of 
either  the  manufactured  or  the  natural  products  of  a 
given  state,  and  for  that  reason  no  attempt  is  made  to 
list  these  products  in  the  order  of  their  value.  Only  the 
more  important  products  of  each  state  are  listed. 

Statements  in  these  summaries  which  are  enclosed  in 
quotation  marks  are  taken  verbatim  from  reports  received 
in  making  this  survey. 

27 


ALABAMA 

Population 

Rural,     1,839,857 
Urban,       509,317 


PRODUCTS 
Manufactured  Natural 

a.  Cotton  goods 

b.  Lumber  products 

c.  Iron  and  steel  products 

d.  Cottonseed  oil  and  cake 


Production  of  iron  and  steel,  iron  and  steel  products, 
cotton  goods  and  finished  lumber  in  Alabama  suffered  a 
60  per  cent  decline  in  the  six  months  following  the  sharp 
break  in  business  last  year,  but  the  decline  was  checked 
a  few  months  ago  and  recently  an  improvement  has  been 
noticeable.  While  there  is  a  surplus  of  pig  iron,  coal  by- 
products and  cotton  and  steel  products  in  the  hands  of 
manufacturers,  the  surplus  has  been  reduced  about  ten 
per  cent  in  the  last  six  months. 

Manufacturing  costs  have  decreased  about  one-fourth 
in  the  last  year,  the  greater  part  of  the  drop  coming  since 
spring.  Labor,  material  and  construction  costs  have 
decreased  measurably  in  the  order  named,  while  interest 
rates  have  dropped  a  little.  There  has  been  no  decline  in 
taxation  nor  the  cost  of  transportation.  Average  whole- 
sale prices  of  manufactured  goods  produced  in  Alabama 
dropped  steadily  throughout  the  last  twelve  months.  Re- 
tail prices  of  these  goods  showed  an  average  decline  of 
25  per  cent  in  the  first  six  months  and  of  10  per  cent  in 
the  second  six  months. 

There  has  been  a  decrease  in  the  production  of  coal,  cot- 
ton, fruits  and  vegetables,  cattle,  hogs,  sheep  and  hay — 
the  principal  natural  products  of  the  state — and  an  in- 
crease of  25  to  50  per  cent  in  the  production  of  corn, 
which  in  many  parts  of  the  state  was  planted  in  acreage 
formerly  devoted  to  cotton. 

On  September  7  the  price  of  cotton,  of  course  the  great 
product  of  the  state,  was  80  per  cent  above  the  low  point 
it  had  reached  six  months  before,  and  this  increase  was 
being  felt  in  a  noticeable  recovery  of  business.  Improved 
conditions  in  the  last  few  months  have  been  reflected  in  a 

28 


greater  demand  for  short-time  credits,  the  volume  of 
which,  however,  was  less  at  the  end  of  September  than 
at  the  end  of  the  same  month  in  1920.  Country  banks  are 
carrying  a  large  volume  of  "frozen  credits"  on  cotton, 
lumber  and  coal.  Opinion  is,  however,  that  sufficient 
credit  is  available  to  take  care  of  normal  production. 

Foreign  sales  of  raw  materials  and  manufactured  goods 
have  been  increased  in  the  last  six  months  "through  the 
organization  of  export  corporations  and  the  willingness  of 
strong  financial  concerns  to  back  legitimate  exports  of 
cotton  and  lumber." 

ARIZONA 

Population 
Rural,   216,376 
Urban,  117,527 

PRODUCTS 
Natural 

a.  Copper  and   other  metals 

b.  Livestock 

c.  Cotton 

d.  Hay  and   grain 

Southeastern  Arizona  is  a  section  devoted  largely  to 
copper,  silver,  gold  and  lead  mining  and  to  raising  cattle. 
At  the  end  of  August  virtually  no  metals  were  being  pro- 
duced, but  there  had  been  no  noticeable  decline  from  a  year 
ago  in  cattle  raising.  Six  months  ago  production  of  metals 
was  about  one-half  of  normal.  Considerable  surpluses  of 
copper,  lead  and  cattle  are  in  the  hands  of  the  producers, 
although  in  the  last  six  months  there  has  been  a  small  reduc- 
tion in  copper  stores. 

There  have  been  pronounced  decreases  in  the  cost  of  mine 
labor  and  supplies,  which  have  been  offset  to  some  extent  by 
increases  in  taxation.  Copper  could  be  produced  now  at  a 
cost  25  per  cent  lower  than  that  of  a  year  ago.  Prices  of 
both  copper  and  cattle  have  fallen  sharply  from  the  peak, 
but  the  percentage  of  decrease  in  the  last  six  months  has 
been  less  than  that  in  the  first  six. 

The  volume  of  liquid  credits  carried  by  the  banks  has 
decreased  steadily  for  a  year,  but  the  demoralization  of  the 
mining  industries  has  resulted  in  an  increase  in  the  volume 
of  "frozen  credits",  most  of  which,  however,  consist  of 
loans  extended  in  1920.  The  feeling  is  that  railroad  rates 

29 


and  taxes  are  operating  to  keep  the  mines  closed.  The  cost 
of  labor  in  this  district  has  been  adjusted.  Increases  in 
foreign  sales  have  been  inconsiderable. 

Southwestern  Arizona  is  largely  agricultural,  producing 
long  and  short  staple  cotton,  alfalfa  seed,  hay  and  grain. 
There  has  been  a  considerable  reduction  in  the  output  of 
cotton,  but  some  increase  in  hay.  The  surplus  of  cotton  that 
existed  a  year  ago  has  been  reduced  75  per  cent.  Agricul- 
tural costs  are  50  per  cent  less  than  they  were  a  year  ago. 

The  demand  for  short-time  commercial  credits,  while  not 
so  great  as  it  was  a  year  ago,  is  greater  than  it  was  six 
months  ago.  An  indication  of  improved  conditions  is 
found  in  the  fact  that  while  last  year  the  banks  had  to 
carry  the  alfalfa  seed  crop,  this  year's  crop  was  sold. 

In  this  part  of  the  state  "frozen  credits,"  consisting 
chiefly  of  those  extended  in  1920,  have  decreased,  but  the  feel- 
ing is  that  liquidation  has  not  progressed  to  a  point  at  which 
sufficient  credit  exists  to  take  care  of  normal  production. 
Railway  rates  and  the  comparatively  slow  decline  in  the 
prices  of  finished  goods  are  considered  to  be  the  principal 
influences  working  against  the  farmers  in  this  part  of  Ari- 
zona. Encouragement  is  found  in  the  recent  upward  turn  in 
cotton  prices  and  steady  improvement  is  expected  in  the  next 
year. 

Conditions  throughout  the  state  correspond  to  those  in 
the  southwestern  and  southeastern  parts,  as  Arizona,  except 
for  a  few  small  manufactories,  is  entirely  an  agricultural, 
mining  and  livestock-raising  state. 

ARKANSAS 

Population 

Rural,    1,461,707 
Urban,       290,497 

PRODUCTS 
Manufactured  Natural 

a.  Lumber  products  a.    Cotton 

b.  Cotton-seed  oil  and  cake  b.    Corn 

c.  Lumber 

d.  Livestock 

A  great  reduction  in  the  output  of  cotton  and  lumber 
produced  in  Arkansas  has  been  the  natural  consequence 
of  a  lessened  demand  for  these  commodities.  Considerable 
surpluses  of  these  two  products  are  held  in  the  state. 

30 


Except  for  the  output  of  a  few  industries  of  comparatively 
small  importance,  the  state  produces  none  but  natural 
products. 

The  cost  of  production  has  been  reduced  considerably, 
the  principal  decline  taking  place  in  labor  and  materials. 
Cotton  acreage  throughout  the  state  has  been  reduced 
25  to  30  per  cent,  and  fields  formerly  planted  to  cotton 
have  been  planted  to  corn  and  other  food  and  feed  crops. 
Corn  now  ranks  as  the  second  crop  of  the  state. 

Foreign  sales  of  natural  products  have  decreased  in  the 
last  year,  and  at  a  lesser  rate  in  the  last  six  months. 
"Inasmuch  as  a  large  part  of  our  production  is  exported, 
we  think  the  general  demoralization  of  Europe  is  one  of 
the  conditions  holding  back  the  readjustment  of  prices." 

Demand  for  short-time  commercial  credits  has  de- 
creased, but  the  volume  of  "frozen  credits"  remains  large. 
Production  of  finished  lumber  has  decreased  35  per  cent  in 
the  last  year ;  of  coal,  zinc  and  bauxite  30  per  cent,  and  of 
manganese  60  per  cent.  Conditions  in  these  industries  in 
the  last  six  months,  however,  have  shown  some  improve- 
ment. 

A  measurable  decline  in  costs  of  agricultural  produc- 
tion has  taken  place  in  the  last  year.  Manufacture  of 
wood  products  has  increased  about  25  per  cent  in  the  last 
six  months. 

CALIFORNIA 

Population 

Rural,     1,095,132 
Urban,   2,331,729 

PRODUCTS 

Manufactured  Natural 

a.  Canned  Goods  a.  Fruits  and  vegetables 

b.  Petroleum  products  b.  Petroleum 

c.  Iron  and  steel  products  c.  Grains 

d.  Building  materials  d.  Minerals 

e.  Flour  e.  Livestock 

f.   Lumber 

Throughout  California  the  volume  of  manufacturing, 
although  less  than  it  was  at  the  peak,  is  greater  than  it 
was  six  months  ago,  except  in  the  metal  trades,  shipbuild- 
ing and  oil  refining.  The  considerable  surplus  of  finished 
goods  that  existed  a  year  ago  has  been  largely  reduced  to 

31 


normal  size,  except  in  the  case  of  canned  goods  and  build- 
ing materials.  Costs  of  production  have  decreased  ^as  far 
as  labor  and  materials  are  concerned,  but  there  has  been 
little  decline  in  construction  costs,  and  none  in  taxation 
nor  transportation.  There  has  been  a  general  decrease  in 
the  wholesale  prices  of  manufactured  goods,  the  rate  of 
decline  being  more  rapid  in  the  last  six  months. 

Natural  products  in  the  northern  part  of  the  state, 
consisting  largely  of  hay,  fruit,  grains,  oil,  cattle  and 
sheep,  lumber  and  minerals,  are  produced  on  the  average 
in  quantities  very  little,  if  any,  below  those  of  a  year  ago. 
Surpluses  of  some  fruits,  wool,  beans,  rice  and  oil  exist, 
but  they  are  less  than  they  were  a  year  ago  and  less 
than  they  were  six  months  ago.  The  costs  of  production 
are  20  to  30  per  cent  below  those  of  a  year  ago,  the  prin- 
cipal decline  coming  in  the  last  six  months.  Wholesale 
prices  of  natural  products,  which  are  far  below  prices  a 
year  ago,  have  declined  very  little  in  the  last  six  months. 

The  demand  for  short-time  credits  is  less  than  it  was 
a  year  ago  and  less  than  it  was  six  months  ago,  although 
recently  the  demand  has  shown  a  tendency  to  increase. 
"Frozen  credits"  in  northern  California  have  been  liqui- 
dated to  a  large  extent  and  those  remaining  consist  chiefly 
of  loans  extended  last  year.  Foreign  sales  have  increased 
considerably  in  the  last  six  months. 

In  southern  California  the  principal  natural  products, 
citrus  fruits,  petroleum,  hay,  cattle  and  garden  crops,  are 
produced  in  virtually  the  same  quantities  as  a  year  ago. 
There  is  some  surplus  of  olives  and  beans  and  a  heavy 
surplus  of  cotton,  but  these  surpluses  have  been  mate- 
rially reduced,  particularly  in  the  last  six  months.  Labor 
costs  are  down  about  one-quarter,  but  other  costs  have 
not  been  materially  reduced.  Wholesale  price  reductions 
of  natural  products  in  the  last  year  range  up  to  50  per 
cent,  but  there  has  been  no  decline  to  speak  of  in  the 
last  six  months. 

Surpluses  of  manufactured  goods  produced  in  southern 
California  have  been  reduced  in  the  last  year  so  that  now 
they  are  little  greater  than  normal.  Demand  for  short- 
time  credits  has  decreased  and  "frozen  credits"  have  been 
reduced  approximately  30  per  cent.  "High  railroad  rates, 
maladjustment  between  farm  and  retail  prices,  resisting  of 
wage  reductions,  foreign  exchange  situation,"  are  charac- 
terized as  influences  holding  back  readjustment. 

There  has  been  some  increase  in  the  exportation  of  raw 
materials  produced  in  southern  California  to  the  Orient 
in  the  last  few  months. 

32 


COLORADO 

Population 

Rural,     486,370 
Urban,    453,259 

PRODUCTS 

Manufactured  Natural 

a.  Metal  products  a.    Sugar  beet* 

b.  Canned  Meats  b.   Livestock 

c.  Canned  fruits  c.   Hay  and  grains 

d.  Flour  mill  products  d.   Gold,  silver,  lead,  zinc 

e.  Beet  sugar  and  copper 

e.    Fruits  and  vegetables 

Colorado's  production  of  beet  sugar,  meat  products, 
canned  fruits  and  vegetables,  flour  and  various  other  com- 
modities is  on  the  whole  60  to  80  per  cent  of  the  produc- 
tion a  year  ago,  but  there  has  been  a  20  per  cent  increase 
in  the  last  six  months.  The  surpluses  of  finished  goods 
that  existed  a  year  ago  have  been  largely  wiped  out. 
There  was  a  10  per  cent  reduction  in  the  cost  of  produc- 
tion in  the  first  six  months  of  the  last  twelve,  and  a  15 
per  cent  reduction  in  the  last  six.  Taxation  has  increased, 
but  materials,  construction  costs,  labor,  and  to  a  slight 
extent  money,  have  decreased.  Wholesale  prices  of  goods 
produced  in  Colorado  have  decreased  20  per  cent  in  the 
last  year  and  10  per  cent  in  the  last  six  months.  Meats 
are  down  to  pre-war  prices  and  flour  almost  to  pre-war 
prices. 

Livestock,  sugar  beets,  hay,  wheat,  precious  metals  and 
the  other  natural  products  of  the  state  were  produced  in 
1921  in  the  same  volume  on  the  whole  as  in  1920.  Con- 
siderable surpluses  of  wheat,  corn  and  wool  are  in  the 
hands  of  producers.  One-quarter  of  the  1920  wheat  crop 
remained  unsold  in  the  middle  of  August,  1921,  and  one- 
half  the  1920  corn  crop  was  in  the  hands  of  the  farmers. 
Wholesale  prices  of  natural  products  dropped  steadily 
throughout  the  year,  but  the  rate  of  decline  was  not  so 
great  in  the  last  six  months  as  in  the  first. 

There  has  been .  considerable  liquidation  of  "frozen 
credits"  in  agricultural  loans,  but  not  so  much  in  wool 
and  livestock  loans.  "When  people  learn  the  difference 
between  true  constructive  credit  and  spending  money 
there  will  be  enough  credit  in  Colorado  for  all  legitimate 
credit  demands.  We  are  climbing  the  hill,  but  the  grade 

33 


is  steep,  the  road  is  narrow  and  our  vision  is  blurred  by 
our  own  interests  and  our  lack  of  confidence  in  what  the 
other  man  is  trying  to  do." 

CONNECTICUT 

Population 
Rural,    444,292 
Urban,  936,339 

PRODUCTS 
Manufactured  Natural 

a.  Metal  products  a.    Tobacco 

b.  Foundry  products  b.   Corn 

c.  Arms  and  ammunition  c.    Hay  and  forage 

d.  Hardware  d.   Fruits  and  vegetables 

Connecticut's  metal  products  are  reported  to  be  manu- 
factured this  year  in  quantities  50  per  cent  smaller  than  a 
year  ago.  Production  is  less  than  it  was  six  months  ago, 
although  the  decline  since  spring  has  not  been  as  rapid 
as  it  was  last  fall  and  winter.  Surpluses  of  manufactured 
goods,  except  in  the  case  of  some  kinds  of  machines  and 
parts  and  some  sorts  of  tools,  are  not  greater  than  normal. 
Many  large  concerns,  however,  have  adopted  the  policy  of 
producing  only  to  order. 

Declines  in  the  prices  of  labor  and  materials  and  the 
increased  efficiency  of  labor  have  worked  toward  a  reduc- 
tion of  the  cost  of  production,  which  is  less  than  it  was  a 
year  ago  and  less  than  it  was  six  months  ago.  In  Hart- 
ford County  "our  average  running  time  is  39  hours,  com- 
pared with  the  normal  running  time  of  52  hours,  with 
corresponding  reduction  in  working  force."  Production 
of  tobacco,  fruit,  garden  truck  and  dairy  products  on  the 
whole  is  as  great  as  it  was  a  year  ago. 

In  some  parts  of  the  state  a  slight  decline  in  the 
demand  for  short-time  credits  is  reported,  but  "frozen 
credits"  have  been  gradually  liquidated. 

Connecticut,  being  largely  a  manufacturing  state,  feels, 
generally  speaking,  all  the  conditions  that  lessened  demand 
has  brought  about  in  industry. 


34 


DISTRICT  OF  COLUMBIA 
Population 

437,571    (entirely  urban) 

As  the  District  of  Columbia  has  little  manufacturing 
and  no  farming,  except  in  a  small  way,  most  of  the  ques- 
tions asked  in  connection  with  the  Second  Economic  Sur- 
vey were  not  applicable. 

Those  factories  that  do  exist  in  the  District,  however, 
are  producing  less  than  half  the  quantities  of  finished 
goods  that  they  manufactured  a  year  ago,  although  there 
has  been  no  decline  in  the  last  six  months.  A  20  per  cent 
decrease  in  the  cost  of  production,  confined  almost  entirely 
to  the  cost  of  materials,  is  reported.  Wholesale  and  retail 
prices  of  these  products  are  reported  to  have  dropped 
about  one-fourth  in  the  last  year. 

FLORIDA 

Population 

Rural,    612,645 
Urban,  355,825 

PRODUCTS 

Manufactured  Natural 

a.  Naval  stores  a.    Phosphates 

b.  Tobacco  products  b.   Corn 

c.  Fertlizers  c.   Tobacco 

d.  Lumber 

e.  Fruits  and  vegetables 

"Florida's  phosphate  mines  and  lumber  mills  are  virtu- 
ally all  closed  down  because  of  the  lack  of  export  demand 
in  the  phosphate  business  and  of  both  export  and  domestic 
demand  in  the  lumber  business." 

In  southern  Florida,  where  the  manufacture  of  cigars 
is  an  industry  of  great  importance,  production  has  de- 
creased more  than  one-half  in  the  last  year,  although  very 
little  change  has  taken  place  'in  the  last  six  months. 
Large  surpluses  of  cigars,  lumber,  naval  stores  and  phos- 
phate are  reported  and  these  surpluses  have  increased  in 
the  last  year. 

There  have  been  material  reductions  in  the  cost  of 
labor  in  the  sawmills  and  phosphate  mines  and  a  large  re- 
duction in  the  cost  of  production  of  naval  stores,  "but  the 
naval  stores  operators  say  they  have  not  yet  been  able  to 

35 


reduce  the  cost  of  production  so  that  they  can  operate  on 
the  present  market  except  at  a  loss.  The  surplus  of  phos- 
phate is  held  for  sale  at  practically  any  price  at  all." 
Wholesale  prices  of  naval  stores,  lumber  and  phosphate 
are  reported  to  be  much  less  than  half  the  prices  a  year 
ago,  "but  there  has  been  very  little  recession  in 
the  prices  of  lumber  and  naval  stores  during  the  last  six 
months".  Retail  prices  of  these  commodities  are  reported 
to  have  been  reduced  50  to  60  per  cent  in  the  last  year 
and  less  than  25  per  cent  in  the  last  six  months. 

In  western  Florida- a  large  carry-over  of  many  kinds  of 
farm  products  is  reported.  This  surplus  has  not  been 
reduced  considerably  in  the  last  year.  In  the  agricultural 
section  is  noted  a  fall  of  40  per  cent  in  the  cost  of  pro- 
duction, of  which  fully  90  per  cent  has  taken  place  in  the 
last  six  months.  Exports  of  lumber,  naval  stores  and 
phosphates  have  decreased  steadily  during  the  last  year. 

"The  local  situation  is  marked  by  a  certain  re-establish- 
ment of  public  confidence  in  the  future,  a  firm  morale 
among  debtors  with  apparently  hopeless  indebtedness,  sub- 
stantial building  operations  incident  to  the  low  costs  of 
materials  and  labor,  and  the  apparent  certainty  of  a  sure 
market  at  more  satisfactory  prices  than  last  fall  for  agri- 
cultural products  that  were  produced  at  a  minimum  of 
cost." 

GEORGIA 

Population 
Rural,    2,167,973 
Urban,      727,859 

PRODUCTS 

Manufactured  Natural 

a.  Cotton  goods  a.    Cotton 

b.  Cotton-seed  oil  and  cake  b.   Corn 

c.  Naval  stores  c.   Lumber 

d.  Fertilizers  d.   Fruits 

e.   Phosphates 

Like  all  southern  states,  Georgia  has  felt  the  serious 
effects  of  the  great  decline  in  the  price  of  cotton.  A  40  per 
cent  decrease  in  the  production  of  cotton  in  the  central 
part  of  the  state,  due  chiefly  to  a  reduction  of  cotton 
acreage,  has  been  offset  to  some  extent  by  an  increase  of 
25  per  cent  in  the  production  of  grain.  In  the  last  year 

36 


there  has  been  a  considerable  decrease  in  livestock,  and  in 
production  of  timber  and  clays,  with  an  increase  of  one- 
third  in  horticultural  products.  In  this  central  part  of  the 
state  there  is  a  surplus  of  feedstuffs,  of  lumber,  and,  of 
course,  of  cotton,  but  in  the  last  six  months  the  surplus 
of  cotton  has  been  reduced  15  per  cent. 

Costs  of  production  of  agricultural  commodities  have 
been  reduced  greatly  in  the  last  year.  On  the  last  of 
August  the  sale  price  of  cotton  showed  an  increase  of  30 
per  cent  in  six  months  and  a  similar  improvement  was 
reported  in  the  price  of  feedstuffs. 

In  southern  Georgia  an  increase  of  25  per  cent  in  the 
six  months  ending  September  15  was  reported  to  have 
taken  place  in  the  production  of  lumber  and  lumber  pro- 
ducts, oil  mill  products,  fertilizers  and  feed  mill  products. 
The  costs  of  production  in  these  industries  were  reported 
to  have  decreased  50  per  cent.  Surplus  stocks  of  agricul- 
tural products  and  lumber  in  this  part  of  the  state  are  re- 
ported to  have  been  reduced  almost  50  per  cent  in  the 
last  six  months.  "High  taxes  and  low  prices  of  commodi- 
ties produced  in  Georgia,  coupled  with  freight  rates,  are 
holding  us  back." 

The  demand  for  short-time  credits  throughout  the  state 
is  reported  to  be  less  than  a  year  ago,  but  the  liquidation 
of  "frozen  credits"  has  been  inconsiderable.  "The  reduc- 
tion of  the  cotton  acreage  and  diversification  of  crops  is 
expected  to  prevent  a  recurrence  of  the  demoralization  that 
in  the  past  has  accompanied  a  low  price  for  cotton," 


IDAHO 

Population 

Rural,    312,829 
Urban,  119,037 

PRODUCTS 
Natural 

a.  Hay 

b.  Wheat  and  other  grains 

c.  Lead,  silver,  gold  and  zinc 

d.  Lumber 

e.  Livestock 

f .  Fruits  and  vegetables 

Productive    Idaho    is    divided    into    three    districts    of 
unequal  size.     The  mining  section  lies  in  the  north  and 

37 


the  lumber  producing  district  in  the  northwest;  the 
broader  southern  part  of  the  state  is  largely  devoted  to 
agriculture  and  livestock-raising. 

Reports  are  that  because  of  the  state's  distance  from 
primary  markets,  and  the  consequent  effect  of  high  freight 
rates,  farm  prices  of  agricultural  products  in  the  last  year 
have  fallen  possibly  to  a  greater  degree  than  they  have  in 
some  other  parts  of  the  country.  A  report  dated  Septem- 
ber 9  says :  "Wheat  is  worth  here  about  40  per  cent  of  the 
price  it  commanded  last  year,  hay  about  30  per  cent  of  last 
year's  price,  cattle  about  50  per  cent  and  hogs  about  60 
per  cent." 

Another  report  is  that  "grain  is  moving  slowly  on 
account  of  the  high  freight  rate  to  Portland,  Oregon,  the 
primary  market.  There  is  little  market  for  hay  at  any 
price,  as  sheep  and  cattle  have  been  and  are  being  shipped 
out  of  the  country."  A  large  part  of  the  1920  wool  clip 
remains  unsold  in  the  warehouses.  There  are  also  sur- 
pluses of  grain  and  hay. 

Conditions  in  the  mining  district  are  described  as  fol- 
lows, in  a  report  dated  two  weeks  ago:  "The  lead  pro- 
ducer is  selling  his  pig  lead  at  pre-war  prices,  but  is  still 
paying  peak  freight  rates,  and  for  white  lead,  manufac- 
tured from  his  cheap  pig,  he  still  pays  war  prices.  The 
lead  miner  is  working  for  $4.25  a  day  producing  this  com- 
modity and  paying  the  railroad  worker  $10  to  $15  a  day 
for  hauling  it  to  market.  When  it  is  manufactured  into 
white  lead  he  pays  13^  cents  a  pound  wholesale  for  it 
and  $8  to  $12  a  day  to  a  painter  for  spreading  it  on  his 
house.  The  mines,  which  normally  produce  one-third  of 
the  income  of  the  state,  are  working  on  a  fifty  per  cent 
basis." 

The  lumber  mills  in  northwestern  Idaho  are  operating 
on  a  greatly  reduced  scale,  but  the  surplus  stocks  of  lum- 
ber existing  a  year  ago  have  been  reduced  considerably, 
it  is  reported. 

Costs  of  production  throughout  the  state  have  been 
greatly  reduced,  the  principal  decline  being  in  the  cost  of 
labor,  with  materials  and  construction  costs  following  in 
the  order  named.  Transportation  costs  have  remained 
stationary  and  taxation  has  increased. 

In  many  districts  a  shortage  of  credit  is  reported, 
despite  a  lessened  demand  for  short-time  credits  and  a 
gradual  reduction  in  the  volume  of  "frozen  credits." 
"Many  of  the  credits  which  we  thought  were  liquid  a 
year  ago  have  become  frozen.  We  have  an  abundance  of 
feed  and  little  available  credit  to  buy  animals  to  feed  it  to." 

38 


ILLINOIS 

Population 
Rural,    2,079,602 
Urban,  4,405,678 

PRODUCTS 
Manufactured  Natural 

a.  Packed  meats  and  meat  products 

b.  Iron  and  steel  and  their  products 

c.  Agricultural  implements 

d.  Wood  products 

e.  Clothing 

Virtually  without  exception  the  varied  manufacturing 
industries  of  Illinois  have  reduced  production  in  the  last 
year.  Common  opinion  is,  however,  that  the  rate  of  reduc- 
tion in  the  last  six  months  has  not  been  as  great  as  it  was 
last  fall  and  winter.  "Unusually  large  inventories,  which  are 
not  moving  at  the  rate  producers  would  like,  are  reported 
in  the  case  of  farm  implements,  automobile  tires  and  auto- 
mobiles. About  other  commodities  it  is  difficult  to  make 
precise  statements,  although  there  are  reports  indicating 
that  there  is  a  tendency  for  inventories  to  be  reduced." 
An  authority  in  Chicago  says,  "There  has  been  consider- 
able sale  of  all  types  of  goods  so  that  the  surplus  in  the 
hands  of  manufacturers  is  not  as  large  as  it  was  six 
months  ago  in  most  lines  of  industry." 

The  largest  reduction  in  the  cost  of  manufacturing  has 
been  in  the  cost  of  materials.  In  the  steel  industry  there 
have  been  three  successive  reductions  of  wages,  and  in 
many  lines,  while  wage  rates  have  not  decreased,  greater 
efficiency  of  labor  is  reported  to  have  reduced  costs.  Con- 
struction costs  in  the  Chicago  district  are  reported  not  to 
have  declined  to  any  material  extent  in  the  last  year. 
Transportation  costs  have  not  decreased. 

"It  is  generally  reported  that  wholesale  prices  of  manu- 
factured goods  produced  in  this  district  have  greatly 
receded  from  the  high  point  reached  in  the  early  part  of 
1920.  The  decrease  has  been  gradual  and  steady.  Retail 
prices,  on  the  other  hand,  have  decreased  on  an  average 
only  20  per  cent,  and  most  of  the  reduction  has  come 
within  the  last  six  months." 

Surplus  stocks  of  coal,  corn,  oats  and  other  natural 
products  in  Illinois  have  been  gradually  decreasing  for  a 
year,  more  particularly  in  the  last  six  months.  "The 

39 


extent  of  this  liquidation  is  not  exactly  known,  but  we 
do  know  that  the  farmers  have  been  selling  their  corn  in 
fairly  large  quantities  in  recent  months  and  as  a  result 
have  been  liquidating  their  bank  debts  somewhat."  Pro- 
duction of  agricultural  products  this  year  is  expected  to 
equal  that  of  1920. 

"Last  year  a  hired  man  on  the  farm  in  this  part  of 
the  country  received  $60  to  $75  a  month,  while  at  pres- 
ent he  is  receiving  $30  to  $35.  On  the  other  hand,  the 
farmer  is  paying  for  everything  except  labor  about  as 
much  as  he  did  a  year  ago  or  six  months  ago.  In  fact, 
this  is  the  chief  difficulty  of  the  situation:  The  farmer  is 
receiving  only  about  pre-war  prices  for  his  products,  while 
in  most  cases  he  is  still  paying  prices  far  above  those  he 
was  accustomed  to  paying  before  the  war.  In  the  last 
month  or  so  the  prices  of  agricultural  products  have  gone 
up  a  little,  although  the  price  of  livestock  is  still  exceed- 
ingly low." 

Throughout  the  state  a  lessened  demand  for  all  kinds 
of  commercial  credits  is  reported.  The  decrease  in  "frozen 
credits"  is  reported  to  have  been  small.  Taxation,  the 
railway  situation,  the  tariff  and  government  interference 
with  business  are  characterized  as  influences  retarding 
readjustment,  "but  fundamentally,  the  chief  difficulty 
which  prevents  speedier  readjustment  is  still  to  be  found 
in  the  foreign  situation." 

INDIANA 

Population 

Rural,    1,447,535 
Urban,  1,482,855 

PRODUCTS 

Manufactured  Natural 

a.  Meats  a.   Corn 

b.  Automobiles  and  accessories  b.   Cattle 

c.  Metal  castings,  machinery  and  c.    Hogs 

tools  d.    Hay  and  forage 

d.  Flour  and  feeds  e.    Small  grains 

e.  Lumber  and  wood  products  f .    Petroleum 

Conditions  in  the  central  part  of  the  state  and  in  the 
highly  developed  industrial  section  in  the  northwest  are 
typical  of  those  throughout  Indiana.  One  report  dealing 
with  finished  goods  says  that  in  the  last  year  there  has 
been  a  decline  in  production  ranging  from  15  to  50 

40 


per  cent.  The  last  six  months,  however,  have  shown  an 
increase  of  15  per  cent  in  the  quantity  of  meat  products, 
10  per  cent  in  automobiles  and  accessories  and  10  per  cent 
in  drugs  and  chemicals  and  furniture.  A  small  surplus  of 
automobiles  and  accessories  that  existed  a  year  ago  is 
reported  to  have  been  absorbed,  but  a  considerable  sur- 
plus of  agricultural  implements  and  many  steel  products 
is  reported  in  northwestern  Indiana. 

Costs  of  production  in  industry  have  declined  steadily 
throughout  the  year,  but  at  a  greater  rate  in  the  last  six 
months.  Costs  of  materials,  labor  and  construction  are 
reported  to  have  declined  in  the  order  named,  but  taxes 
have  increased  and  transportation  costs  have  not  de- 
clined. The  decline  of  wholesale  prices  of  finished  goods 
in  the  last  year  has  ranged  from  8  per  cent  to  45  per  cent. 
Reductions  in  retail  prices  of  commodities  produced  in  In- 
diana range  from  30  per  cent  in  food  products  to  an  aver- 
age of  15  per  cent  in  other  articles.  Most  of  the  decline 
in  food  prices  took  place  in  the  first  six  months  of  the 
year,  while  two-thirds  of  the  retail  price  decline  of  other 
articles  occurred  in  the  last  six  months. 

Decreases  ranging  from  3  per  cent  in  wheat  to  40  per 
cent  in  oats  are  reported  to  have  taken  place  in  the  out- 
put of  a  number  of  agricultural  products  in  the  last  year. 
There  has  been  no  decrease  in  the  production  of  cattle 
and  a  slight  increase  in  the  production  of  hogs.  A  surplus 
of  corn,  oats  and  wheat  is  reported.  The  greatest  decrease 
in  the  costs  of  agricultural  production  has  been  in  the  cost 
of  labor,  although  materials  and  construction  costs  have 
declined  somewhat.  This  reduction  has  been  offset  to  a 
considerable  extent  by  an  increase  in  taxation,  transporta- 
tion costs  and  interest  rates.  "There  has  been  an  average 
decrease  of  about  one-half  in  prices  paid  to  the  farmer, 
but  virtually  none  of  this  recession  has  taken  place  in  the 
last  six  months." 

Banks  are  reported  to  be  carrying  a  larger  volume  of 
liquid  credits  than  normal,  but  the  demand  for  short-time 
credits  is  less  than  it  was  a  year  ago  and  less  than  it  was 
six  months  ago.  The  volume  of  "frozen  credits"  has 
steadily  decreased.  "The  reduced  cost  of  both  labor  and 
materials,  more  economical  methods  of  manufacturing,  re- 
duced overhead  and  increased  efficiency,"  are  characterized 
as  influences  working  to  restore  normal  conditions,  while 
"high  taxes,  transportation  costs,  slow  deflation  of  labor 
costs  and  the  continuation  of  government  restrictions  on 
business,"  are  named  as  deterrent  influences.  Foreign 
sales  of  Indiana  products  have  decreased  in  the  last  year. 

41 


IOWA 

Population 
Rural,    1,528,526 
Urban,       875,495 

PRODUCTS 
Manufactured  Natural 

a.  Meat  products  a.   Corn 

b.  Flour  mill  products  b.   Cattle 

c.  Foundry  products  and  ma-  c.   Hogs 

chinery  d.    Oats  and  other  grains 

d.  Wood  products  e.    Hay  and  small  grains 

f .   Dairy  products 

A  great  reduction  in  the  cost  of  labor,  coupled  with 
the  return  of  a  large  number  of  workmen  from  the  cities 
to  the  farms  and  an  early  and  favorable  season  has 
enabled  the  farmers  of  Iowa  to  harvest  their  crops  this 
year  at  a  cost  of  production  considerably  less  than  that 
which  prevailed  during  the  cultivating  and  harvesting 
period  last  year.  Farm  rentals,  which  high  values  of  farm 
products  had  brought  to  a  peak  in  the  summer  of  1920, 
are  reported  to  have  decreased  greatly. 

Surpluses  of  corn  and  other  farm  products  that  existed 
a  year  ago  had  not  been  entirely  liquidated  as  the  harvest 
of  1921  approached.  Cheaper  production  and  the  gradual 
consumption  of  world  surpluses  of  agricultural  .commod- 
ities, however,  lend  color  to  the  opinion  of  one  banker 
"that  the  1921  crops  will  move  more  readily  than  those  of 
last  year  and  the  farmers  will  be  enabled  to  liquidate  some 
of  their  indebtedness  and  buy  larger  quantities  of  manu- 
factured goods." 

Natural  products  throughout  the  state  will  be  equal  in 
volume  to  the  production  of  last  year,  although  a  report 
from  the  northwest  corner  of  the  state  says  that  low 
prices  have  resulted  in  a  15  per  cent  reduction  in  that 
district. 

Many  reports  from  Iowa  iterate  the  statement  that 
"our  grains  are  selling  at  prices  50  to  75  per  cent  below 
the  peak,  while  virtually  all  the  things  our  farmers  buy 
have  fallen  relatively  little  in  price.  We  cannot  catch  up 
until  these  price  levels  get  together."  Influences  tending  to 
retard  this  price  adjustment  are  enumerated  as  follows: 
"Excessive  transportation  charges,  excessive  taxation  and 
lack  of  suitable  financial  organization  to  handle  exports  of 
agricultural  products." 

42 


An  average  reduction  of  25  to  30  per  cent  in  the  out- 
put of  manufactured  goods  produced  in  Iowa  is  reported. 
Almost  all  this  reduction,  however,  took  place  last  fall 
and  winter,  and  in  the  last  six  months  there  has  been  vir- 
tually no  retrogression  in  industry.  The  surplus  stocks 
of  manufactured  goods  are  not  excessive  and  were  re- 
ported to  be  less  on  September  1  than  at  any  time  in  six 
months. 

Costs  of  production  have  decreased  steadily  through- 
out the  year,  the  decrease  being  apparent  in  materials, 
labor  and  construction  costs  in  the  order  named.  Trans- 
portation costs  have  not  been  reduced  and  taxation  has 
increased.  Prices  of  manufactured  goods  produced  in 
Iowa  are  reported  to  have  decreased  steadily,  but  not  in 
the  same  proportion  as  those  of  agricultural  products.  The 
price  of  coal  in  central  Iowa  is  reported  to  be  50  cents  a 
ton  higher  than  it  was  a  year  ago. 

In  the  last  six  months,  due  to  seasonal  buying,  the 
demand  for  short-time  credits  has  increased  slightly  and 
the  decrease  of  "frozen  credits,"  consisting  chiefly  of  loans 
extended  before  1921,  is  variously  estimated  at  from  5  to 
15  per  cent.  "Foreign  sales  of  manufactured  goods  and 
raw  materials  have  decreased  during  the  last  year  because 
of  lack  of  capital  to  extend  long-time  foreign  credits  and 
because  of  unfavorable  exchange  rates." 


KANSAS 

Population 

Rural,    1,151,293 
Urban,       617,964 

PRODUCTS 

Manufactured  Natural 

a.  Flour  a.   Wheat 

b.  Packed  meats  b.    Corn 

c.  Butter  c.   Petroleum 

d.  Oats 

e.  Cattle 

f.  Hogs 

A  moderate  surplus  of  agricultural  products  and  a 
large  surplus  of  livestock  is  reported  in  central,  southern* 
and  northwestern  Kansas.  Production  is  reported  to  be 
as  great  in  1921  as  in  1920.  Reductions  in  the  cost  of 

43 


labor,  and  to  a  smaller  extent  of  materials  are  reported  to 
have  brought  about  a  decrease  of  about  one-fourth  in  the 
cost  of  agricultural  products.  Kansas  farmers  have  expe- 
rienced, of  course,  the  common  reduction  in  the  price  of 
agricultural  products.  The  reduced  price  of  oil  is  reported 
to  have  resulted  in  a  curtailment  of  production. 

An  increase  in  the  output  of  many  flour  mills  and  pack- 
ing houses  is  reported  to  have  taken  place  in  the  last  few 
months.  Costs  of  production  have  declined  in  the  last 
year  and  in  the  last  six  months,  the  items  decreasing  in  the 
following  order:  materials,  labor,  money,  construction 
costs.  An  increase  in  taxation  and  stationary  transporta- 
tion costs  are  reported  in  the  manufacturing  districts. 
High  freight  rates  and  taxes  and  slow  adjustment  of  la- 
bor conditions  are  characterized  as  "millstones  around  the 
neck  of  business." 

Foreign  sales  of  wheat  and  flour  are  reported  to  have 
increased  about  one-fourth  in  the  last  year,  largely  within 
the  last  six  months.  The  volume  of  ''frozen  credits"  has 
been  considerably  reduced  and  the  demand  for  short-time 
credits  is  reported  to  be  less  than  it  was  a  year  ago. 

"There  is  a  better  feeling  in  business  circles;  there  is 
a  gradual  liquidation  of  loans  and  commodities,  but  few 
retailers  have  taken  their  losses  and  are  selling  goods  at 
prices  based  on  the  present  wholesale  prices." 


KENTUCKY 

Population 

Rural,    1,783,087 
Urban,       633,543 

PRODUCTS 
Manufactured  Natural 

a.  Flour  mill  products  a.   Corn 

b.  Lumber  products  b.   Tobacco 

c.  Tobacco  products  c.    Small  grains 

d.  Foundry  and  machine-shop  d.    Hay 

products  e.   Coal 

f.   Livestock 

Production  of  tobacco,  corn  and  livestock  in  western 
Kentucky  is  reported  to  have  been  reduced  to  some  extent 
in  the  last  year.  Surpluses  of  corn  and  cattle  existing  a 
year  ago  have  not  declined  considerably.  In  the  agricul- 

44 


tural  districts  of  the  state  a  reduction  of  one-third  in  the 
cost  of  production,  due  to  declines  in  the  costs  of  labor, 
construction  and  materials  in  the  order  named  is  reported. 
A  15  per  cent  increase  in  the  volume  of  shoe  manufactur- 
ing is  reported  by  one  banker  to  have  taken  place  in  one 
part  of  Kentucky  within  the  last  few  months.  Production 
of  cigars  and  other  tobacco  products  has  decreased  in  the 
last  year,  but  not  very  much  in  the  last  six  months.  Manu- 
facturing costs  are  reported  to  have  decreased  in  the  fol- 
lowing order:  materials,  construction  costs,  interest  rates 
and  labor. 

The  demand  for  short-time  credits  is  reported  to  be 
less  than  it  was  a  year  ago,  but  greater  than  it  was  six 
months  ago.  There  has  been  no  considerable  decrease  in 
the  volume  of  "frozen  credits."  An  omen  of  better  times 
is  seen  by  one  banker  in  "a  growing  willingness  on  the 
part  of  the  public  to  forget  the  losses  of  the  past  and 
work  like  fury  to  improve  the  present ;  a  tendency  to  come 
after  business  instead  of  waiting  for  it  to  come  as  we  did 
at  the  peak.  About  10  per  cent  of  the  people  are  still 
holding  back  and  endeavoring  to  avoid  losses  by  getting 
war-time  prices  for  both  goods  and  labor.  When  this  is 
eliminated  we  believe  there  will  be  a  speedy  readjust- 
ment." 


LOUISIANA 

Population 

Rural,    1,170,346 
Urban,       628,163 

PRODUCTS 
Manufactured  Natural 

a.  Oil  products  a.   Sugar 

b.  Refined  sugar  and  molasses  b.    Cotton 

c.  Canned  goods  c.   Rice 

d.  Wood  products  d.   Corn 

e.  Cotton  goods  e.    Oil 

f.  Lumber 

g.  Livestock 

In  the  last  twelve  months,  it  is  reported,  there  has 
been  a  reduction  of  about  one-fourth  in  the  output  of 
finished  goods  in  Louisiana,  but  a  slight  increase  in  most 

45 


lines  has  taken  place  in  the  last  few  months.  Surpluses 
of  some  products  that  existed  a  year  ago  have  been  almost 
entirely  eliminated.  Almost  three-fourths  of  the  average 
reduction  of  25  per  cent  in  the  costs  of  manufacturing 
has  taken  place  in  the  last  six  months.  Factors  in  the 
cost  of  production  have  declined  in  the  following  order: 
materials,  labor  and  money;  transportation  costs  have  re- 
mained stationary  and  taxation  has  increased. 

Wholesale  prices  of  goods  made  in  Louisiana  have 
declined  considerably  in  the  last  year  and  in  the  last  six 
months.  Retail  prices  of  these  goods  show  a  consider- 
able decrease  for  the  year,  but  not  much  of  a  decline  for 
the  last  six  months. 

Corn  and  sugar  crops  are  reported  to  be  very  much 
better  this  year  than  last,  but  there  is  a  decline  in  the 
production  of  cotton,  rice,  lumber  and  sulphur.  A  sur- 
plus of  naval  stores,  lumber,  rice  and  cotton  is  reported, 
but  the  surplus  is  smaller  than  it  was  a  year  ago  and 
smaller  than  it  was  six  months  ago.  The  costs  of  agricul- 
tural production  are  reported  to  have  decreased  about  30 
per  cent,  labor,  material  and  money  declining  in  the 
order  named.  Wholesale  prices  of  natural  products  of 
Louisiana  are  very  much  lower  than  they  were  a  year  ago, 
but  not  so  much  lower  than  they  were  six  months  ago. 

Generally  speaking,  the  demand  for  short-time  credits 
is  less  than  it  was  a  year  ago  and  the  volume  of  "frozen 
credits"  has  decreased  a  little.  Common  opinion  is  that 
sufficient  credit  is  available  to  take  care  of  normal  pro- 
duction. Foreign  sales  of  Louisiana  products  have  de- 
clined in  the  last  year.  "High  wages,  high  taxes  and  the 
stagnation  of  foreign  trade  are  injuring  everybody  in 
Louisiana.  The  effect  of  extraordinary  Federal  taxation 
discourages  individual  effort.  As  an  example  of  this: 
Last  year  there  were  two  rice  farmers  side  by  side;  one 
with  200  acres  of  rice,  the  other  with  1,000.  Both  made 
good  crops  and  received  good  prices,  but  by  reason  of 
taxes  imposed  the  man  with  the  1,000  acres  made  no  more 
than  the  man  with  200  acres.  Naturally,  the  1,000  acre 
man  thereafter  curtailed  his  activities." 


46 


MAINE 

Population 

Rural,  468,445 
Urban,  299,569 

PRODUCTS 
Manufactured  Natural 

a.  Cotton    and    woolen  a.    Hay 

cloth  b.    Potatoes  and   other  veg- 

b.  Paper  and  pulp  etables 

c.  Finished  lumber  c.   Oats  and  other  grains 

d.  Wood  products  d.    Granite,  lime  and  slate 

e.  Ships  e.   Fish 

Maine  has  felt  in  company  with  the  rest  of  New  Eng- 
land the  industrial  depression  that  resulted  from  decreased 
purchasing,  domestically  and  abroad.  Woolen  and  felt 
mills  in  the  district  bordering  Penobscot  Bay  are  reported 
to  be  producing  less  than  they  were  a  year  ago,  but  there 
has  been  no  reduction  of  output  as  compared  with  six 
months  ago.  A  large  part  of  the  goods  produced  in  this 
district  are  manufactured  on  order,  and  the  fact  that  there 
has  been  no  decrease  in  production  in  the  last  few  months 
is  taken  to  indicate  a  checking  of  the  decrease  in  con- 
sumption. 

The  paper  industry  is  improving,  although  rather 
slowly.  Costs  of  materials,  labor,  money  and  construction 
are  reported  to  have  decreased  in  the  last  year  in  the 
order  named.  "The  decrease  in  the  cost  of  labor  has  been 
apparent  to  some  extent  in  reduced  wages,  but  more  par- 
ticularly in  increased  efficiency."  Production  of  lumber 
and  wood  products  has  been  reduced  about  one-fifth  and 
a  surplus  of  long  lumber,  shingles  and  laths  is  reported. 
The  decrease  in  the  cost  of  lumber  production  in  Maine  is 
reported  to  be  almost  entirely  in  the  item  of  labor.  Trans- 
portation costs  remain  stationary  and  taxation  has  in- 
creased. A  steady  reduction  in  both  wholesale  and  retail 
prices  of  Maine  products  is  reported. 

Foreign  sales  have  not  increased  in  the  last  year.  In 
some  parts  of  the  state  an  increased  demand  for  short- 
time  credits  has  been  noticed  in  the  last  few  months.  The 
volume  of  "frozen  credits"  in  Maine  is  reported  to  be 
inconsiderable. 


47 


MARYLAND 
Population 

Rural,  580,239 
Urban,  869,422 

PRODUCTS 
Manufactured  Natural 

a.  Clothing  a.   Corn 

b.  Iron  and  steel  b.   Wheat 

c.  Ships  c.   Fruits  and  vegetables 

d.  Canned  goods  d.   Livestock 

e.  Metal  products  e.   Coal 

f.   Sea  foods 

"While  the  quantity  of  the  2,000  different  commodities 
manufactured  in  Maryland  shows  a  marked  reduction 
since  last  year,  the  decrease  is  not  so  great  as  would  be 
indicated  by  the  difference  in  value."  It  is  reported  that 
the  diminution  of  production  has  been  "progressive  from 
month  to  month  since  January,  but  June  and  July  pre- 
sented an  approach  to  equilibrium.  August  showed  a 
slight  tendency  to  increase  production  in  several  lines,  but 
the  output  still  is  less  than  it  was  six  months  ago."  A 
surplus  of  manufactured  goods  in  a  great  many  lines  has 
grown  appreciably  less  in  the  last  few  months.  The  hold- 
over of  canned  goods,  however,  is  reported  to  be  very 
large. 

"There  has  been  some  reduction  in  wages  and  some 
drop  in  the  cost  of  basic  raw  materials,  but  the  decline  in 
wages  has  not  been  commensurate  with  the  decline  in  raw 
materials."  A  reduction  of  from  10  to  60  per  cent  in  the 
cost  of  all  materials  used  in  Maryland  factories,  except 
coal,  is  reported,  compared  with  a  reduction  of  10  to  20 
per  cent  in  the  wages  of  men  employed  in  the  various 
industries.  "There  has  been  a  reduction  of  30  to  50  per 
cent  in  the  wholesale  prices  of  goods  produced  in  this 
state  in  the  last  year,  the  greater  part  of  the  reduction 
taking  place  in  the  first  six  months."  Retail  prices  have 
not  dropped  commensurately  with  wholesale  prices. 

On  the  whole,  agricultural  production  in  Maryland  will 
equal  that  of  1920,  although  the  weather  has  been  unfav- 
orable to  some  crops.  Surpluses  of  wheat  and  tobacco 
existing  a  year  ago  have  been  reduced  considerably.  Farm 
labor  is  reported  to  be  more  plentiful  and  its  wage  has 

48 


been  reduced  one-fifth,  "but  prices  of  farm  implements 
have  not  some  down  enough  and  construction  costs  have 
not  been  reduced  to  a  point  sufficiently  low  to  induce 
building  operations." 

The  volume  of  "frozen  credits"  in  the  state  has  de- 
creased somewhat  and  the  demand  for  credits  is  less  than 
it  was  a  year  ago  and  less  than  it  was  six  months  ago. 


MASSACHUSETTS 

Population 
Rural,        202,108 
Urban,  3,650,248 

PRODUCTS 
Manufactured  Natural 

a.  Textiles  a.   Hay  and  forage 

b.  Boots  and  shoes  b.   Fruits  and  vegetables 

c.  Leather  goods  c.   Lumber 

d.  Electrical   machinery  d.   Building    and     monu- 

e.  Foundry  and  machine  shop  mental  stone 

products 

f .  Paper  products 

Production  in  the  cotton  textile  industry  in  Massa- 
chusetts is  reported  to  be  on  a  basis  20  per  cent  below 
that  of  a  year  ago,  but  the  output  of  woolen  and  worsted 
goods  factories,  which  were  suffering  a  great  depression  a 
year  ago,  has  been  improved  fully  75  per  cent.  Produc- 
tion was  at  a  high  level  in  the  boot  and  shoe  industry  in 
September,  1920,  but  has  since  declined  more  than  one- 
fourth.  "There  may  be  some  cause  for  optimism  in  the 
showing  of  a  75  per  cent  increase  in  the  cotton  consump- 
tion as  compared  with  six  months  ago  and  in  the  fact 
that  our  consumption  of  woolen  is  almost  double  what  it 
was  six  months  ago  and  that  production  in  the  boot  and 
shoe  industry  shows  an  increase  of  50  per  cent  during  the 
same  period." 

The  textile  industries  have  accumulated  surplus  stocks, 
which  during  the  last  six  months  have  been  gradually 
decreased.  The  absorption  of  surplus  stocks  of  boots  and 
shoes  has  progressed  at  an  increasingly  rapid  rate  during 
the  past  six  months.  "It  may  be  stated  broadly  that  the 
greatest  decrease  as  affecting  the  cost  of  production  has 

49 


occurred  in  the  cost  of  raw  materials.  Labor  would  come 
next,  then  money;  while  the  items  of  transportation,  taxa- 
tion and  construction  costs  have  shown  no  decline.  Wage 
reductions  on  varying  scales  have  been  general  through- 
out the  textile  trade.  There  is  also  to  be  considered  the 
fact  that  limited  production,  which  has  been  the  rule  dur- 
ing the  past  six  months,  has  been  a  factor  in  cost.  It  is, 
of  course,  evident  that  mill  operation  on  part  time  must 
be  uneconomical  and  result  in  increased  cost  per  unit  of 
production." 

Wholesale  prices  of  manufactured  products  of  Massa- 
chusetts show  a  decline  of  40  per  cent  in  a  year.  "Cotton 
goods  prices,  while  they  are  60  per  cent  below  the  level 
one  year  ago,  are  10  per  cent  above  the  low  for  the  entire 
year,  which  occurred  about  six  months  ago."  Wholesale 
prices  of  woolen  goods,  which  reached  the  peak  about  the 
middle  of  1920,  declined  50  per  cent  in  the  next  six  months 
and  there  has  been  virtually  no  change  in  recent  months. 
The  decline  of  boot  and  shoe  prices  has  not  been  as  great 
as  that  of  textiles,  "but  it  should  be  noted  that  while  there 
has  been  a  large  shrinkage  in  the  price  of  raw  materials, 
there  ha.s  been  practically  no  reduction  in  labor  costs,  the 
most  important  item  in  the  manufacture  of  these  goods." 

Because  a  large  part  of  its  output  consists  of  fruits  and 
vegetables  agricultural  Massachusetts  has  not  suffered  to 
the  same  extent  as  many  other  states  through  the  reduc- 
tion of  prices  of  farm  products.  "Fruits  and  vegetables 
of  all  sorts  stand  at  about  the  same  wholesale  price  now 
as  a  year  ago."  Production  of  lumber  in  Massachusetts  is 
reported  to  be  about  50  per  cent  of  normal.  "Operating 
costs  have  fallen  about  40  per  cent  since  1919-20  and  were 
it  not  for  increased  freight  rates,  native  lumber  would  sell 
for  practically  pre-war  prices." 

An  appreciable  decrease  in  the  volume  of  "frozen 
credits"  throughout  Massachusetts  is  reported  to  have 
taken  place  within  the  last  year.  "The  European  situa- 
tion, the  wage  question,  high  freight  rates  and  the  excess 
profits  tax  are  working  against  speedy  readjustment." 


50 


MICHIGAN 

Population 
Rural,    1,426,852 
Urban,  2,241,560 

PRODUCTS 

Manufactured  Natural 

a.  Automobiles  and  accessories 

b.  Furniture  and  Wood  products 

c.  Machinery 

d.  Drugs  and  chemicals 

e.  Pulp  and  paper 

f.  Prepared  foods 

The  output  of  the  many  kinds  of  commodities  produced 
in  the  industrial  part  of  Michigan  is  reported  to  have 
increased  one-fourth  to  one-half  in  the  last  six  months, 
and  production  on  the  whole  is  within  20  per  cent  of  that 
a  year  ago.  Gradual  reduction  of  surplus  stocks  of  all 
kinds  is  reported  to  have  taken  place  within  the  last  six 
months,  and  at  the  beginning  of  September  an  increasing 
demand  for  a  large  variety  of  manufactured  articles  pro- 
duced in  Michigan  was  noticeable. 

"An  average  reduction  in  costs  of  about  one-fifth  has 
been  effected  in  the  last  six  months.  Labor  has  decreased 
most,  then  materials,  then  construction  costs ;  transporta- 
tion costs  are  as  high  and  taxation  higher  than  a  year 
ago."  "Considering  reduced  wages  and  the  increased 
efficiency  of  labor,  it  is  my  opinion  that  labor  is  returning 
to  industry  today  perhaps  100  per  cent  more  than  a  year 
ago."  A  large  part  of  the  increased  efficiency  of  labor  and 
a  large  percentage  of  wage  decreases  have  occurred  in  the 
last  six  months. 

Wholesale  prices  of  manufactured  goods  produced  in 
the  Detroit  district  are  reported  to  have  decreased  from 
20  to  35  per  cent  in  the  last  year,  "excepting  in  the  special 
lines  where  the  raw  commodity  has  suffered  a  great 
depression.  The  drop  in  copper  and  other  metals,  for 
instance,  has  had  a  tremendous  effect  upon  the  prices  of 
all  metal  consuming  industries." 

Abnormal  surpluses  of  agricultural  and  other  natural 
products  of  Michigan  have  been  largely  reduced,  although 
small  holdings  of  cereals  were  in  the  hands  of  the  farmers 
before  the  1920  crop  was  harvested,  and  the  movement  of 
sugar  was  reported  to  be  slow.  Labor  in  the  beet-growing 

51 


district  is  much  more  plentiful  than  it  was  a  year  ago, 
wages  are  lower  and  production  costs  as  a  whole  are 
reported  to  have  fallen  off  more  than  30  per  cent.  Copper 
and  metal  prices  "have  not  declined  in  the  last  six  months 
and  now  there  is  a  prospect  of  advance." 

The  demand  for  short-time  credits  in  some  parts  of 
Michigan  has  strengthened  considerably  in  the  last  six 
months ;  six  months  ago  production  was  at  a  very  low 
ebb.  Some  decrease  in  the  volume  of  "frozen  credits"  is 
reported.  "The  foreign  trade  situation  and  the  slow  reduc- 
tion of  retail  prices  are  holding  back  readjustment." 


MINNESOTA 

Population 
Rural,    1,335,532 
Urban,  1,051,593 

PRODUCTS 

Manufactured  Natural 

a.  Flour  and  grist  mill  a.    Wheat 

products  b.   Corn 

b.  Wood  products  c.   Iron  ore 

c.  Steel  products  d.   Lumber 

d.  Meat  products  e.   Varied  farm  crops 

f.   Livestock 

Production  of  virtually  all  natural  products  of  Minne- 
sota, except  iron  ore  and  lumber,  is  as  great  in  1921  as 
in  1920.  Reports  from  the  northeastern  part  of  the  state 
are  that  a  demand  for  lumber  and  iron  ore  existing  in 
January  has  largely  disappeared,  and  "now  there  is  a  large 
surplus  of  ore  and  the  yards  are  full  of  lumber  that  can- 
not move."  Mines  are  reported  to  be  operating  at  about 
one-third  capacity.  Costs  in  the  mining  and  lumber  pro- 
ducing districts,  which  were  the  same  six  months  ago  as 
they  were  a  year  ago,  have  since  been  reduced  one-third. 
A  price  of  iron  made  last  spring  is  reported  not  to  have 
been  maintained  and  "if  the  producers  wish  to  sell  they 
are  cutting  $1  a  ton  from  the  price  made  six  months  ago." 

A  surplus  of  grain,  which  has  been  steadily  reduced 
throughout  the  year,  is  reported  in  the  agricultural  sec- 
tion. A  report  from  the  south  central  part  of  the  state 
is  that  crops  will  be  smaller  this  year  than  last.  The 
cost  of  farm  labor  has  declined  greatly,  materials  a  little 

52 


and  construction  costs  slightly.  Stationary  transportation 
costs  and  higher  taxes  are  reported. 

Production  of  flour,  meat  products,  agricultural  imple- 
ments and  most  other  commodities  manufactured  in  the 
industrial  districts  is  less  than  it  was  a  year  ago,  but  not 
materially  less  than  six  months  ago.  Surplus  stocks  of 
virtually  all  manufactured  products  are  reported.  Costs  of 
materials,  construction  and  labor  have  decreased  in  the 
order  named,  and  wholesale  prices  of  most  finished  goods 
have  declined  steadily  throughout  the  year. 

"Among  the  factors  that  require  readjustment  I  should 
name  first,  taxes;  second,  the  railroad  situation;  third, 
labor  costs,  and  fourth,  the  prices  of  natural  products. 
The  government  should  leave  legitimate  business  alone." 


MISSISSIPPI 

Population 

Rural,    1,550,497 
Urban,       240,121 

PRODUCTS 
Manufactured  Natural 

a.  Cotton-seed  oil  and  cake  a.    Cotton 

b.  Lumber  products  b.    Corn 

c.  Lumber 

d.  Hay  and  small  grains 

e.  Fruits  and  vegetables 

The  reduction  of  cotton  acreage  prevalent  throughout 
the  south  of  course  affected  Mississippi.  Fields  formerly 
sown  to  cotton  were  planted  to  corn  this  year  and  the 
increased  production  of  corn  in  most  parts  of  the  state 
is  reported  to  have  offset  the  reduced  size  of  the  cotton 
crop.  Lack  of  demand  has  resulted  in  a  great  reduction 
in  the  output  of  lumber.  The  surplus  of  cotton  in  south- 
western Mississippi  is  reported  to  have  been  reduced  50 
per  cent  during  the  last  six  months.  "We  believe  the 
recent  entry  of  Great  Britain  into  the  cotton  market, 
together  with  unusually  small  crops,  has  strengthened 
cotton  prices  and  is  an  indication  of  permanently  better 
times  for  cotton  planters." 

Costs  of  production  of  cotton  are  reported  to  have 
decreased  greatly,  the  principal  item  being  the  reduced 
cost  of  labor.  A  report  dated  September  9  said :  "Cotton 

53 


has  more  than  doubled  in  price  in  six  months  and  has 
therefore  doubled  the  value  of  Mississippi's  great  staple." 
"Prices  received  by  the  farmer  are  ridiculously  low. 
However,  after  his  products  have  passed  through  the 
packing  houses,  factories  and  wholesalers  and  retailers  the 
price  to  the  farmer  is  ridiculously  high." 

MISSOURI 

Population 
Rural,    1,817,152 
Urban,   1,596,903 

PRODUCTS 
Manufactured  Natural 

a.  Meat  products  a.   Corn 

b.  Flour  and  grain  products  b.   Livestock 

c.  Petroleum  products  c.    Small   grains 

d.  Metal  products  d.   Fruits  and  vegetables 

e.  Wood  products  e.   Lead  and  zinc 

f.  Shoes  and  leather  products  f.   Lumber 

g.  Railway  cars 

A  gradual  decrease  in  the  production  of  metal  and 
wood  products  has  taken  place  during  the  year.  Boot 
and  shoe  factories  and  clothing  manufacturers  were  re- 
ported to  be  active  at  the  end  of  August.  Production  of 
building  materials  and  wood  products  has  decreased  pro- 
gressively throughout  the  year.  The  output  of  packing 
houses,  soap  factories  and  flour  and  grist  mills  has  been 
steadily  increasing  in  the  last  six  months.  Production  of 
oil  refineries  has  been  reduced.  In  most  manufacturing 
lines  surplus  stocks  have  been  reduced  greatly  in  the  last 
six  months. 

Costs  of  production  and  manufacturing  are  reported  to 
be  25  per  cent  lower  than  they  were  six  months  ago  and 
35  per*  cent  lower  than  a  year  ago.  "This  reduction  is 
based  principally  upon  reductions  in  prices  of  raw  mate- 
rials and  labor  and  upon  the  increased  efficiency  of  labor. 
Transportation  and  taxation  remain  high."  A  progressive 
reduction  in  wholesale  prices  of  finished  goods  has  been 
accelerated  during  the  last  six  months,  although  a  report 
from  the  St.  Louis  district  is  that  "there  have  been  reduc- 
tions in  fewer  lines  in  the  last  six  months  than  in  the 
first  six."  Sixty  per  cent  of  the  reduction  in  retail  prices 
of  clothing,  food  and  finished  lumber  in  the  last  year  has 

54 


taken  place  in  the  last  six  months.  Flour  production  in 
the  Kansas  City  district  was  very  much  larger  in  July 
than  in  June. 

Stocks  of  meats  and  packing  products  are  reported  to  be 
about  normal,  but  "stocks  of  petroleum  products  at  refin- 
eries at  this  date  are  the  largest  of  record." 

Corn,  wheat,  oat  and  hay  crops  in  1921  are  smaller  than 
those  of  last  year  and  there  has  been  a  slight  decrease  in 
the  number  of  head  of  livestock  on  the  farms  and  ranges. 
Coal  production  is  about  one-fourth  less  and  lead  produc- 
tion one-third  less.  Surpluses  of  wheat,  corn,  oats,  barley, 
crude  oil,  lead  and  zinc  ore  and  coal  are  reported.  Costs 
of  labor  and  materials  used  in  agriculture  and  mining  in 
Missouri  have  decreased  in  the  last  year  in  the  order 
named,  bringing  about  an  average  reduction  ranging  from 
10  per  cent  in  mining  to  25  per  cent  in  agriculture.  "Farm 
prices  for  wheat  and  corn  are  about  48  per  cent  less  than 
they  were  a  year  ago,  but  the  price  of  corn  is  slightly 
greater  than  it  was  six  months  ago.  As  this  is  written 
hog  prices  are  15  per  cent  above  the  low  level  and  sheep 
prices  25  per  cent  above  it.  Prices  of  lead  and  zinc  ores 
are  50  per  cent  less  than  they  were  a  year  ago,  but  only 
7  per  cent  less  than  they  were  six  months  ago." 

The  demand  for  short-time  credits  is  reported  to  be 
less  than  it  was  a  year  ago,  but  slightly  heavier  than  it 
was  six  months  ago.  "Missouri  has  sufficient  credit  avail- 
able for  all  legitimate  needs."  "Frozen  credits"  have  de- 
creased considerably  in  the  industrial  sections,  but  an 
increase  is  reported  in  some  agricultural  districts.  "The 
maljbr  part  of  the  'frozen  credits'  are  those  which  we  had 
to  carry  beginning  in  October,  1920,  and  I  should  say  more 
than  half  of  them  will  have  to  be  carried  another  eigh- 
teen months." 

"If  the  government  will  fund  the  railroad  debt  and 
labor  in  the  building  trades  will  come  down  it  will  do 
much  to  quicken  business/' 


MONTANA 

Population 
Rural,    376,878 
Urban,   172,011 

PRODUCTS 

Natural 

a.  Cattle 

b.  Sheep 

c.  Wool 

d.  Grain 

e.  Copper 

f.  Silver 

g.  Gold 

A  heavy  reduction  in  the  production  of  copper,  Mon- 
tana's great  metal  product,  has  been  consequent  upon  con- 
tracted markets  at  home  and  abroad  and  greatly  reduced 
prices.  In  some  parts  of  the  state  a  complete  shut-down 
of  mines  and  smelters  is  reported,  although  on  the  whole 
the  decrease  in  production  in  the  last  six  months  has  not 
been  great.  "The  output  of  metals  is  not  40  per  cent  as 
large  as  it  was  last  year."  Low  prices  of  virtually  all 
Montana's  products  and  slow  liquidation  of  these  natural 
products  have  resulted  in  holding  up  the  volume  of 
"frozen  credits",  which  consisted  largely  of  credits  ex- 
tended in  1920.  "Favorable  changes  are  expected  in  the 
next  ninety  days,  due  to  sales  of  matured  farm  products." 

Costs  of  production  have  been  decreased  10  to  30  per 
cent  in  the  last  year,  the  greater  part  of  the  decline  tak- 
ing place  in  the  last  six  months.  Factors  in  the  cost  of 
production  have  decreased  in  the  following  order :  labor, 
materials  and  construction.  Wholesale  prices  of  metals, 
cattle  and  agricultural  products,  of  course,  have  declined 
greatly  from  the  peak,  but  many  reports  from  various 
parts  of  the  state  indicate  that  the  decline  in  the  last  six 
months  has  been  relatively  slight. 

"Caring  for  the  surplus  production  of  Montana  will 
tax  the  ability  of  almost  every  bank  in  the  state." 


56 


NEBRASKA 

Population 

Rural,   891,066 
Urban,   405,306 

PRODUCTS 
Manufactured  Natural 

a   Meats   and    livestock  a.   Corn 

products  b.    Wheat 

b.    Flour  mill  products  c.   Livestock 

d.  Hay  and  small  grains 

e.  Dairy  products. 

The  output  of  packing  house,  dairy  and  flour  mill 
products  in  Nebraska  shows  an  increase  over  six  months 
ago,  although  the  volume  of  flour  and  other  mill  products 
is  materially  less  than  that  produced  a  year  ago.  The  sur- 
plus stocks  of  manufactured  goods  that  existed  at  the  end 
of  1920  are  reported  to  have  been  disposed  of.  Cotton 
goods  and  leather  used  in  Omaha  factories  have  declined 
materially  in  cost  in  the  last  year  and  decreased  costs  of 
labor  and  construction  also  are  reported.  "Freight  rates 
and  taxes  are  excessively  high."  Wholesale  prices  of 
Omaha  products  are  considerably  lower  than  they  were  a 
year  ago,  but  the  rate  of  decline  in  the  last  six  months 
has  not  been  as  rapid  as  it  was  in  the  preceding  six 
months.  "Retail  prices  of  our  products  have  been  reduced 
all  along  the  line,  but  there  has  not  been  the  same  reduc- 
tion in  retail  prices  as  there  has  been  in  wholesale  prices." 

Corn,  wheat  and  oat  crops  throughout  the  state  are 
uniformly  larger  than  they  were  last  year,  but  in  some 
parts  of  Nebraska  a  decrease  in  the  number  of  head  of 
cattle  is  reported.  There  is  a  surplus  of  corn  larger  than 
the  requirement  for  feeding  and  a  surplus  of  oats  also  is 
reported.  Foreign  sales  of  breadstuffs  and  meat  products 
havei  increased.  Costs  of  production  in  the  agricultural 
districts  have  been  reduced  one-fourth  to  one-half,  the 
items  of  materials,  labor,  construction  costs  and  money 
having  declined  in  the  order  named.  Land  values  have 
also  declined. 

"This  state  does  not  need  the  amount  of  credit  it  has 
used  for  the  last  five  or  six  years.  We  believe  there  is  a 
sufficient  amount  of  capital  available  within  the  state  to 
care  for  Nebraska's  legitimate  demands."  "Frozen  cred- 
its" have  decreased  in  volume  and  the  demand  for  short- 

57 


time  credits  is  reported  to  be  less  than  it  was  a  year  ago 
and  less  than  it  was  six  months  ago. 

"The  adjustment  of  international  credit  is  necessary 
before  normal  conditions  can  be  restored.  We  are  so 
closely  related  to  the  rest  of  the  world  that  one  part  of 
the  machine  cannot  operate  unless  the  entire  machine  is 
mechanically  correct.  We  in  Nebraska  would  be  living  in 
sod  houses,  clothed  in  hemp  and  eating  cornbread,  meat 
and  potatoes  if  it  were  not  for  our  relations  with  the  rest 
of  the  world." 


NEW  HAMPSHIRE 

Population 
Rural,     163,322 
Urban,  279,761 

PRODUCTS 

Manufactured  Natural 

a.  Cotton  goods  a.    Hay 

b.  Woolen  and   felt  goods  b.   Fruits  and  vegetables 

c.  Boots  and  shoes  c.   Grains 

d.  Wood  products 

e.  Paper  and  pulp 

Conditions  in  New  Hampshire's  cotton  industries  are 
reported  to  have  improved  so  much  during  the  last  six 
months  that  production  now  is  three-fourths  of  normal. 
Large  surpluses  of  cotton  goods  and  shoes  are  reported 
to  be  held  in  storehouses  in  the  industrial  district  in  the 
southern  part  of  the  state.  Wage  cuts  and  increased  effi- 
ciency have  greatly  reduced  the  cost  of  labor,  and  prices 
of  materials  have  also  fallen  considerably. 

In  common  with  those  of  other  New  England  states, 
New  Hampshire  industries  have  been  affected  by  in- 
fluences felt  in  all  industrial  centers  in  the  country. 


58 


NEW  MEXICO 

Population 

Rural,    295,390 
Urban,     64,960 

PRODUCTS 
Natural 

a.  Cattle 

b.  Sheep  and  wool 

c.  Varied  farm  crops 

d.  Coal 

e.  Metals 

A  considerable  surplus  of  wool  is  reported  in  the  west- 
ern and  southwestern  livestock  sections,  and  abnormally 
large  numbers  of  beef  cattle  and  sheep  ready  for  sale  can 
find  no  market.  There  is  also  a  surplus  stock  of  hay  and 
other  feeds.  Farm  crops  larger  than  those  of  a  year  ago 
are  reported  in  this  district.  Prices  of  all  the  natural 
products  of  New  Mexico,  except  coal,  of  course  have 
declined  greatly  in  the  last  year,  but  the  decrease  has 
not  been  great  in  the  last  six  months.  In  the  Santa  Fe 
district  a  decline  in  the  production  of  farm  crops,  wool, 
sheep,  cattle,  coal  and  lumber  is  reported  to  have  taken 
place  in  the  last  year. 

Costs  of  production  in  the  agricultural  and  stock-rais- 
ing districts  have  declined  on  the  average  one-third  in  the 
last  year.  The  decreases  have  taken  place  in  the  items 
of  labor,  materials  and  construction  costs  in  the  order 
named.  Taxation  has  increased. 

The  great  decline  in  the  value  of  livestock  and  wool  is 
reported  to  have  severely  strained  the  available  credit 
within  the  state  and  the  volume  of  "frozen  credits"  has 
increased  in  the  last  year,  but  "we  would  be  in  good  shape 
to  enter  the  new  year  if  the  ordinary  channels  would  take 
care  of  our  products  at  reasonable  figures." 

"High  freight  rates  are  holding  our  products  back  more 
than  any  other  factor;  it  takes  half  a  man  receives  for  his 
sheep  and  cows  to  pay  the  freight  to  market." 


59 


NEW  YORK 


Population 
Rural,    1,794,985 
Urban,  8,589,844 

PRODUCTS 


Manufactured 


a.  Clothing 

b.  Printed  matter 

c.  Textiles 

d.  Meat  products 

e.  Foundry  and  machine-shop  products 

f.  Varied  finished  goods  of  all  kinds 

g.  Bakery  products 


Natural 

a.  Hay  and  forage 

b.  Fruits  and  veg- 

etables 

c.  Cereals 

d.  Livestock 

e.  Minerals 


Influences  generated  throughout  the  country  and 
throughout  the  world  are  reflected  in  conditions  in  New 
York,  the  manufacturing  and  industrial  center  of  the 
country.  So  many  kinds  of  commodities  are  manufactured 
in  New  York,  and  the  extent  to  which  the  various  indus- 
tries are  affected  by  country-wide  and  world-wide  condi- 
tions varies  so  greatly,  that  in  a  brief  summary  anything 
more  than  a  general  discussion  of  the  industrial  situation 
is  impossible. 

As  in  all  parts  of  the  country,  the  output  of  goods 
manufactured  in  New  York  has  decreased  greatly  since 
1920,  although  the  output  of  some  kinds  of  clothing  and 
furnishings  is  reported  to  have  increased  slightly  very 
recently.  There  are  no  great  surpluses  of  these  commod- 
ities in  the  hands  of  manufacturers,  and  on  the  whole 
surplus  stocks  of  all  kinds  of  manufactured  goods  have 
been  largely  absorbed  within  the  last  year.  Reduced  out- 
put, of  course,  has  prevented  the  accumulation  of  large 
surplus  stocks. 

Costs  of  production  have  declined  steadily  throughout 
the  year,  the  costs  of  materials,  labor,  money  and  con- 
struction falling  in  the  order  named.  There  has  been  no 
decrease  in  the  cost  of  transportation,  and  taxes  are 
slightly  higher.  Wholesale  prices  have  declined  steadily 
throughout  the  year,  although  the  rate  of  reduction  in 
the  last  six  months  probably  has  been  slightly  less  than 
that  in  the  preceding  six  months.  Substantial  reductions 
in  retail  prices  have  been  made  in  the  last  year  and  in 
the  last  six  months. 

The  demand  for  short-time  credits  is  reported  to  be 
less  than  it  was  a  year  ago  and  less  than  it  was  six 

60 


months  ago.  The  volume  of  "frozen  credits"  has  been 
decreased  substantially  in  the  last  six  months.  Exports 
have  decreased  in  the  last  year  and  in  the  last  six  months. 
"The  main  reason  is  that  Europe  already  owes  over 
$4,000,000,000  in  open  account  and  we  have  difficulty  in 
extending  more  credits.  There  is  no  fundamental  solution 
except  the  financial  monetary  and  industrial  rehabilitation 
of  continental  Europe." 

The  principal  influences  retarding  readjustment  are: 
"(1)  prices  of  finished  manufactures  as  compared  with 
prices  of  raw  materials,  (2)  retail  prices,  (3)  wages,  espe- 
cially on  the  railroads,  in  the  building  trades  and  in  the 
coal  fields,  (4)  costs  of  building  materials,  (5)  steel  prices, 
and  (6)  railroad  rates  on  bulky  goods  and  especially  on 
building  materials  and  steel." 

Because  of  its  proximity  to  great  consuming  centers, 
agricultural  New  York  has  not  suffered  so  much  from 
price  declines  as  have  the  great  farming  sections  of  the 
country.  Costs  of  agricultural  labor  have  been  reduced 
somewhat  in  the  last  year,  but  "the  price  of  farm  machin- 
ery remains  high." 


NEVADA 

Population 

Rural,    62,153 
Urban,   15,254 

PRODUCTS 
Natural 

a.  Livestock 

b.  Copper 

c.  Silver  and   gold 

d.  Hay  and  grain 

In  the  last  year  copper  production  in  many  parts  of 
Nevada  has  virtually  ceased.  The  surplus  of  copper  is 
reported  to  be  almost  twice  as  great  as  a  year  ago, 
although  the  gradual  reduction  of  production  has,  of 
course,  decreased  the  rate  of  accumulation  in  the  last  six 
months.  Copper  could  be  produced  at  a  cost  one-third 
lower  than  that  of  a  year  ago. 

Hay,  wheat  and  barley  in  the  Carson  Valley  are  re- 
ported to  have  been  produced  in  greater  quantities  this 
year  than  last  and  there  is  a  surplus  of  wheat  and  barley. 

61 


Labor  costs  in  agriculture  have  decreased  more  materially 
than  those  of  materials  and  construction.  The  decline  in 
the  prices  of  Nevada  cattle  and  hogs  is  reported  to  have 
been  checked  within  the  last  six  months,  but  sheep  prices 
are  still  on  the  down  grade.  Retail  prices  of  beef,  pork 
and  mutton  have  declined  at  about  one-half  the  rate  of 
decrease  of  cattle,  hop  and  sheep  prices. 

In  some  localities  the  demand  for  short-time  credits 
is  said  to  have  increased  in  the  last  six  months.  "Long 
and  short-haul  railroad  rates  prove  a  big  detriment  to  local 
production.  Increased  federal,  state  and  county  taxes, 
coupled  with  increased  assessment  values,  are  not  com- 
mensurate with  the  earning  capacity  of  the  property." 

NORTH  CAROLINA 

Population 
Rural,    2,068,753 
Urban,       490,370 

PRODUCTS 

Manufactured  Natural 

a.  Cotton  goods  a.    Cotton 

b.  Cotton-seed  oil  b.    Tobacco 

c.  Wood  products  c.   Lumber 

d.  Tobacco  products  d.   Corn  and  other  grains 

Reduced  values  of  cotton,  tobacco  and  lumber,  accom- 
panied by  a  decrease  in  the  demand  for  these  commodities 
as  compared  with  that  which  existed  last  year,  have  oper- 
ated to  reduce  the  volume  of  production  of  North  Caro- 
lina's great  natural  products.  As  in  a  number  of  south- 
ern states,  acreage  formerly  devoted  to  cotton  was  planted 
this  year  to  corn.  One  of  the  cotton  producing  counties 
in  the  southern  part  of  the  state  reports  a  carry-over 
decreased  slightly  in  the  last  few  months,  a  40  per  cent 
reduction  in  the  cost  of  production,  due  chiefly  to  the 
reduced  cost  of  labor,  and  a  strengthening  price  just 
beginning  to  be  apparent  at  the  time  the  report  was  pre- 
pared. As  the  season  progressed  a  greater  demand  for 
short-time  credits  was  noticeable  in  the  southern  part 
of  the  state.  In  central  North  Carolina  a  slight  decrease 
in  the  volume  of  "frozen  credits"  has  taken  place  in  the 
last  six  months,  but  a  report  from  the  southern  part  of 
the  state  is  that  "frozen  credits"  have  increased. 

Great  decreases   in   the  price  of  cotton,   tobacco  and 

62 


lumber  have  made  possible  materially  reduced  costs  of 
production  in  the  woodworking,  textile  and  tobacco  indus- 
tries, and  the  output  in  the  central  part  of  the  state  is 
reported  to  be  20  per  cent  greater  than  it  was  six  months 
ago.  Surplus  stocks  of  cotton  goods  and  hosiery  are 
reported  to  be  smaller  than  a  year  ago  and  smaller  than 
six  months  ago.  Wholesale  prices  of  these  manufactured 
goods  are  reported  to  have  fallen  one-third  in  the  last 
year,  most  of  the  reduction  taking  place  in  the  last  six 
months.  "Recent  advances  in  the  price  of  tobacco  and 
cotton  are  helping  greatly." 

NORTH  DAKOTA 

Population 

Rural,     557,446 
Urban,      88,234 

PRODUCTS 
Manufactured  Natural 

a.   Flour  and  grist  mill  a.   Wheat 

products  b.    Hay  and   forage 

c.  Livestock 

d.  Oats 

e.  Rice 

f.  Barley 

North  Dakota,  as  an  essentially  agricultural  district 
whose  great  products  have  uniformly  declined  sharply 
in  value  in  the  last  year,  is  typical  of  agricultural,  live- 
stock producing  and  metal  mining  sections  throughout  the 
country.  The  following  quotations  from  reports  received 
in  this  survey  illustrate  the  situation  throughout  the  state : 

"There  is  too  great  a  difference  between  the  amount 
our  farmers  are  obliged  to  pay  for  manufactured  articles 
in  comparison  with  the  amount  they  receive  for  their 
products.  For  example,  North  Dakota  farmers  get  9  to  10 
cents  a  pound  for  hogs  and  must  pay  the  butchers  65  to  70 
cents  a  pound  for  bacon." 

"Although  wheat  has  fallen  less  than  other  farm  pro- 
ducts it  does  not  return  the  cost  of  production.  We  must 
have  either  less  wages  and  lower  freight  rates  or  higher 
prices  for  farm  products." 

"Too  many  persons  are  trying  to  pass  the  buck  and 
let  the  other  fellow  take  the  loss.  We  need  a  tremendous 
educational  program  conducted  by  the  big  men  of  the 

63 


country.  Organization  and  intelligent  effort  did  the  busi^ 
ness  during  the  war.  There  is  just  as  much  reason  for 
such  organization  and  effort  now  as  then." 

"Present  costs  and  prices  are  so  badly  out  of  harmony 
that  the  farmer  is  and  has  been  losing  money." 

"Liquidation  of  loans  to  farmers  is  slow  because  prices 
of  the  things  they  have  to  sell  have  decreased  more  than 
one-half,  while  prices  of  commodities  they  have  to  buy 
have  remained  comparatively  too  high." 

Large  reductions  in  the  cost  of  farm  labor  throughout 
the  state  are  reported.  There  has  been  no  substantial 
reduction  in  the  price  of  agricultural  implements,  and 
taxes  are  higher  than  they  were  a  year  ago.  The  volume 
of  "frozen  credits"  in  most  parts  of  the  state  has  increased 
rather  than  decreased  in  the  last  six  months.  "Frozen 
credits"  consist  in  greater  part,  however,  of  loans  extended 
before  1921. 

OHIO 

Population 
Rural,    2,082,258 
Urban,  3,677,136 

PRODUCTS 
Manufactured  Natural 

a.  Iron  and  steel  a.  Coal 

b.  Foundry  and  machine-shop  products  b.  Iron 

c.  Packed  meats  and  meat  products  c.  Cereals 

d.  Automobiles  and  parts  d.  Dairy  products 

e.  Rubber  goods          <  e.  Cattle 

f.  Clothing 

The  output  of  iron  and  steel  and  their  products  in 
Ohio  has  been  greatly  decreased  within  the  last  year 
and  even  during  the  last  six  months,  and  now  is  far  below 
the  output  a  year  ago.  Production  of  automobiles  and 
rubber  goods,  however,  has  increased  in  the  last  six 
months.  Surplus  stocks  of  tools,  machinery,  hardware  and 
many  other  kinds  of  metal  products  are  reported,  but  the 
surplus  of  manufactured  metal  goods,  although  greater 
than  it  was  a  year  ago,  is  less  than  it  was  six  months  ago. 

Costs  of  production  in  the  manufacturing  districts  have 
been  reduced  steadily  throughout  the  year,  costs  of  mate- 
rials, labor  and  construction  falling  in  the  order  named. 
Taxation  and  transportation  costs  are  higher  than  they 

64 


were  a  year  ago.  Wholesale  prices  of  manufactured  goods 
have  declined  at  a  uniform  rate  throughout  the  year  and 
now  average  40  per  cent  less  than  they  did  in  the  fall  of 
1920.  Retail  prices  of  these  products  are  reported  to  have 
decline  about  one-fourth,  six-tenths  of  the  drop  coming 
in  the  last  six  months.  "Some  articles  produced  in  this 
state  have  declined  very  little,  but  others  have  dropped 
clear  to  the  bottom." 

Activity  in  the  mining  industries  has  slackened 
throughout  the  year.  Coal,  iron  and  limestone  production 
is  less  than  it  was  six  months  ago.  The  output  of  oil  and 
natural  gas  has  not  greatly  decreased  during  the  year. 
In  the  agricultural  districts  some  surplus  stocks  of  corn, 
wheat  and  wool  are  reported.  Wholesale  prices  of  farm 
products,  of  course,  have  dropped  greatly  during  the  year, 
but  the  rate  of  decrease  in  the  last  six  months  has  not 
been  great.  The  principal  item  in  the  reduction  of  agri- 
cultural costs  has  been  the  decreased  cost  of  labor. 
Foreign  sales  of  commodities  manufactured  in  Ohio  have 
decreased  during  the  year  and  during  the  last  six  months. 

Although  the  volume  of  "frozen  credits"  in  the  state 
as  a  whole  has  decreased,  some  parts  of  Ohio  report  an 
actual  increase  in  the  last  six  months.  The  demand  for 
short-time  credits  is  less  than  it  was  a  year  ago  and 
slightly  less  than  it  was  six  months  ago. 

"The  railroad  situation,  taxation,  high  labor  costs  in 
some  lines  and  lack  of  harmony  in  prices  and  costs"  are 
retarding  the  process  of  readjustment. 

OKLAHOMA 

Population 

Rural,   1,488,803 
Urban,       539,480 

PRODUCTS 
Manufactured  Natural 

a.  Flour  and  mill  products  a.  Petroleum 

b.  Refined  petroleum  b.  Cotton 

c.  Cotton-seed  oil  and  cake  c.  Wheat 

d.  Packed  Meats  d.  Corn 

e.  Oats 

f .  Fruits  and  vegetables 

g.  Livestock 

h.   Lead  and  zinc 

Slow  movement  of  large  surplus  stocks  of  petroleum 
and  cotton  have  prevented  any  great  reduction  in  the 

65 


volume  of  "frozen  credits"  in  Oklahoma  banks  within  the 
last  six  months,  although  in  some  parts  of  the  state  a 
small  reduction  is  reported.  Because  of  reduced  acreage, 
this  year's  cotton  crop  is  not  much  more  than  half  as  large 
as  that  of  1920,  but  an  increase  of  more  than  one-fifth  in 
the  corn  crop  is  reported.  Because  of  climatic  conditions 
small  grain  production  will  be  lower  than  that  of  last  year. 

In  the  agricultural  and  lead  and  zinc  mining  districts 
a  considerable  fall  in  the  costs  of  production  is  reported, 
labor,  materials  and  construction  costs  declining  in  the 
order  named.  The  oil  industries  report  a  very  slight  re- 
duction in  the  cost  of  labor  and  a  greater  fall  in  the  cost 
of  materials  and  construction.  Transportation  costs  and 
taxation  have  not  decreased. 

Meat  packing  and  milling  industries  and  factories  mak- 
ing cottonseed  products  have  reduced  their  output  one- 
tenth  to  one-third  in  the  last  year,  but  there  has  been  no 
change  in  the  last  six  months.  Wholesale  prices  of  com- 
modities manufactured  in  Oklahoma  have  dropped  stead- 
ily at  a  uniform  rate  throughout  the  year.  Costs  of  mate- 
rials, money,  construction  and  labor  have  fallen  in  the 
order  named.  Wholesale  prices  of  natural  products  de- 
clined steadily  until  recently,  but  the  fall  is  reported  to 
have  been  checked  within  the  last  few  months.  "We 
recognize  that  the  decreased  demand  for  Oklahoma  pro- 
ducts is  due  to  lessened  purchasing  power  in  domestic  and 
world  markets,  but  if  labor  costs  were  reduced,  the  taxa- 
tion system  revised  and  transportation  rates  decreased 
there  would  be  an  immediate  revival  of  purchasing." 

OREGON 

Population 
Rural,   392,370 
Urban,  391,019 

PRODUCTS 
Manufactured  Natural 

a.  Lumber  and  wood  products  a.   Lumber 

b.  Flour  and  cereal  products  b.    Wheat  and  other  grains 

c.  Canned  foods  c.   Fruits  and  vegetables 

d.  Woolen  goods  d.   Livestock 

e.  Metal  products  e.   Wool 

f.  Fish 

g.  Dairy  products 

While  there  have  been  great  price  declines  in  lumber, 
grain    and    livestock,    important    natural    products    of    the 

66 


state,  Oregon  has  experienced,  during  the  depression  in 
the  last  year,  increasing  foreign  sales  of  lumber,  wheat  and 
barley  and  vastly  greater  domestic  sales  of  wheat,  barley, 
oats  and  flour. 

Oriental  purchases  of  lumber  have  enlivened  an  indus- 
try that  not  long  ago  was  greatly  depressed,  and  although 
in  some  parts  of  the  state  mills  are  reported  to  be  operat- 
ing at  one-half  capacity,  the  average  output  is  not  more 
than  one-fourth  below  normal.  Domestic  shipments  of 
wheat  out  of  Portland  in  the  first  eight  months  of  this 
year  were  ten  times  as  large  as  in  the  first  eight  months 
of  1920,  and  foreign  shipments  were  more  than  four  times 
as  large.  An  increase  ranging  from  150  per  cent  to  1000 
per  cent  in  domestic  shipments  of  flour,  barley  and  oats 
is  reported  for  the  same  period. 

A  uniform  increase  over  1920  in  the  production  of  all 
Oregon  grains  and  vegetables  is  reported.  Grain  receipts 
in  Portland,  the  shipping  center,  have  been  more  than  twice 
as  great  this  year  as  last.  At  the  same  time  surplus  sup- 
plies of  natural  products  that  existed  a  year  ago  have  been 
almost  entirely  cleared,  although  in  some  sections  a  sur- 
plus of  lumber  and  livestock  is  reported.  Fruit  and  berry 
production  in  the  Willamette  Valley  is  reported  to  be 
below  normal,  but  counties  bordering  the  Columbia  River 
in  north  central  Oregon  report  larger  fruit  crops  than 
those  of  last  year. 

Reduced  costs  of  labor  and  materials  and  increased  effi- 
ciency of  labor  are  reported  both  in  agriculture  and  in 
industry.  One  lumber  manufacturer  reports  "the  greatest 
output  for  August  in  the  history  of  his  business,  with  the 
least  number  of  men."  Production  in  woodworking  indus- 
tries is  less  than  normal,  but  in  cereal  milling,  factories 
making  woolen  goods  and  furniture  factories  production 
is  large.  The  salmon  pack  is  below  normal. 

"Frozen  credits"  have  decreased,  but  "banks  have  real- 
ized within  the  year  that  many  credits  considered  liquid  a 
year  ago  are  not  liquid."  Demands  for  short-time  credits 
have  decreased  in  the  last  year. 

"Lumber  is  the  predominating  industry  in  Oregon,  and, 
excepting  cotton,  copper  and  livestock,  has  fallen  to  a 
greater  extent  than  most  basic  commodities.  We  feel  that 
the  corner  has  been  turned  toward  that  point  at  which 
prices  and  costs  will  be  harmonious  on  a  new  and  prob- 
ably stable  level." 

"Exorbitant  freight  rates  are  holding  back  readjust- 
ment in  this  part  of  the  country.  Prices  of  our  products 
are  down  to  a  proper  level,  but  due  to  the  distance  from 

67 


the  center  of  population  high  freight  rates  make  it  impos- 
sible for  us  to  compete  with  other  producing  centers  of 
the  country." 

PENNSYLVANIA 

Population 
Rural,    3,112,202 
Urban,  5,607,815 

PRODUCTS 
Manufactured  Natural 

a.  Iron  and  steel  products  a.   Coal 

b.  Cotton  and  wool  textiles  b.    Wheat 

c.  Silk  and  silk  goods  c.    Corn 

d.  Hosiery  and  knit  goods  d.    Livestock 

e.  Leather  goods  e.    Petroleum  and 

f.  Tobacco  products  natural  gas 

Surplus  stocks  of  many  kinds  of  iron  and  steel  pro- 
ducts, electrical  equipment  and  food  products  are  reported 
in  the  industrial  centers  of  western  Pennsylvania.  Pro- 
duction in  these  lines  has  decreased  about  one-fifth  in  the 
last  year.  The  reduction  of  output  in  the  last  six  months 
has  been  slight,  and  in  some  lines  a  revival  has  taken 
place  very  recently.  Costs  of  production  in  the  industrial 
centers  are  reported  to  have  declined  almost  one-fifth  in 
the  last  six  months,  materials,  labor  and  interest  rates 
dropping  in  the  order  named.  Wholesale  prices  of  manu- 
factured goods  produced  in  the  Pittsburgh  district  have 
decreased  15  per  cent  in  the  last  six  months  and  25  per 
cent  in  the  last  year.  Retail  prices  of  these  products  have 
not  decreased  at  the  same  rate. 

Production  of  coal,  natural  gas,  petroleum  and  sand 
and  gravel  in  western  Pennsylvania  has  declined  steadily 
throughout  the  year.  Costs  of  production  have  not  de- 
creased materially  in  the  last  six  months,  although  slight 
declines  in  the  cost  of  materials  and  money  are  reported. 
Exports  of  finished  goods  have  decreased  in  the  last  year 
and  in  the  last  six  months.  There  has  been  a  slight  de- 
crease in  the  volume  of  "frozen  credits." 

Although  the  output  of  locomotives,  steel  products, 
street  cars,  textiles,  hats  and  numerous  other  products 
of  the  Philadelphia  region  is  reported  to  be  considerably 
less  than  it  was  a  year  ago,  some  increase  in  production 
in  some  lines  has  taken  place  in  the  last  few  months. 
There  are  considerable  surplus  stocks  of  steel  and  steel 
products.  Costs  of  production  have  decreased  steadily 
throughout  the  year,  principally  in  the  item  of  materials. 

68 


Taxation  has  increased.  "Because  of  lack  of  credits 
exports  of  products  of  this  part  of  Pennsylvania  have  de- 
creased in  the  last  year  and  in  the  last  six  months."  De- 
mand for  short-time  credits  is  less  than  it  was  a  year  ago 
and  less  than  it  was  six  months  ago,  but  "frozen  credits" 
have  decreased. 

"Manufactured  goods  are  too  high  in  proportion  to 
farm  products.  Manufacturing  costs  must  be  lowered 
very  much.  Retailers  must  dispose  of  their  high-priced 
stocks  at  replacement  values  and  buy  on  a  lower  basis." 

The  output  of  coal  in  the  anthracite  region  is  on  the 
whole  25  per  cent  smaller  than  it  was  a  year  ago.  There 
is  a  surplus  of  "steam"  sizes  of  anthracite  and  a  small 
surplus  of  prepared  sizes.  There  was  no  surplus  a  year 
ago.  "The  coal  operators  are  under  agreement  to  pay  the 
present  scale  of  wages  until  April  1,  1922,  but  there  has 
been  some  slight  decrease  in  the  cost  of  production,  by 
reason  of  increased  efficiency  and  lower  material  costs." 
Wholesale  and  retail  prices  of  coal  are  reported  to  be  a 
very  little  lower  than  they  were  a  year  ago.  In  this  dis- 
trict the  volume  of  "frozen  credits"  has  been  reduced  con- 
siderably in  the  last  six  months.  A  recent  increase  in  the 
volume  of  silk  manufacturing  is  reported. 

In  the  agricultural  sections  a  30  per  cent  decrease  in 
the  costs  of  production  and  almost  complete  elimination 
of  surplus  stocks  of  farm  products  is  reported  to  have 
taken  place  since  the  first  of  the  year.  The  decline  in 
prices  paid  to  Pennsylvania  farmers  has  been  checked 
within  the  last  few  months  and  the  volume  of  "frozen 
credits"  is  reported  to  have  been  substantially  reduced. 

RHODE  ISLAND 

Population 
Rural,       15,217 
Urban,  589,180 

PRODUCTS 
Manufactured  Natural 

a.  Cotton  goods  a.    Hay  and  forage 

b.  Woolen  good*  b.   Fruit  and  vegetable* 

c.  Silk  fabric*  c.   Milk 

d.  Machinery  and  tool*  d.    Poultry 

e.  Jewelry 

f.  Rubber  good* 

Production  of  cotton  and  woolen  goods  in  Rhode 
Island  has  increased  nearly  one-third  in  the  last  six 
months.  The  output  of  woolens  two  weeks  ago  was  as 

69 


great  as  it  was  a  year  before,  while  cotton  production 
had  recovered  to  three-fourths  of  its  normal  volume.  Pro- 
duction of  silk  fabrics  and  machine  tools  has  declined 
steadily  during  the  year,  but  at  a  slower  rate  during  the 
last  six  months.  Employment  in  Providence  decreased 
steadily  from  February  to  July  and  took  an  upward  turn 
in  August. 

There  is  a  large  surplus  of  machinery  and  machine 
tools  in  the  hands  of  manufacturers  "because  of  cancel- 
lation of  orders  and  continued  production  after  the  de- 
mand had  fallen  off."  Costs  of  production  have  decreased 
25  per  cent  during  the  year,  the  principal  items  being 
materials  and  labor.  "The  only  reduction  in  taxation  is 
that  caused  by  the  shrinkage  in  value  of  inventories. 
There  has  been  virtually  no  construction  in  Rhode  Island 
in  the  last  year." 

"The  volume  of  'frozen  credits'  seems  to  have  re- 
mained about  the  same,  but  their  status  has  changed 
somewhat.  'Frozen  credits'  representing  loans  to  manu- 
facturers and  producers  have  decreased,  but  those  con- 
sisting of  loans  to  small  retailers  have  increased." 

Natural  products  of  Rhode  Island,  of  course,  are  of 
relatively  small  importance.  Fruit  crops  this  year  are 
smaller  than  in  1920,  but  other  crops  are  about  the  same. 
A  considerable  surplus  of  dairy  products  is  reported. 
Agricultural  costs  have  decreased  in  the  following  order: 
labor,  materials  and  construction  costs. 

"The  repeal  of  the  excess  profits  tax  will  help  as  much 
as  any  one  thing  to  restore  normal  conditions  in  this 
state.  Readjustment  of  labor  conditions  has  been  slow." 

SOUTH  DAKOTA 

Population 

Rural,    534,675 
Urban,   101,872 

PRODUCTS 
Manufactured  Natural 

a.  Flour  and  mill  products  a.    Corn 

b.  Meat  products  b.    Wheat 

c.  Livestock 

d.  Various  grains  and 

vegetables 

e.  Dairy  products 

Comparatively  large  surplus  stocks  of  corn  are  re- 
ported in  most  parts  of  South  Dakota.  The  state  nor- 

70 


mally  markets  about  one-fifth  of  its  corn  crop  and  feeds  the 
rest  to  cattle  and  hogs.  Reports  are  that  in  most  parts 
of  the  state  the  number  of  head  of  livestock  is  unusually 
small  this  year,  and  to  this  fact  is  ascribed  the  surplus 
stock  of  corn.  Grain  crops  in  1921  are  as  large,  if  not 
larger,  than  those  of  1920.  The  decrease  in  livestock  in 
the  state  as  a  whole  is  reported  to  range  from  10  per  cent 
in  sheep  to  one-fifth  in  hogs.  The  number  of  steers  has 
also  declined. 

In  the  last  year  there  has  been  a  reduction  of  more 
than  one-third  in  the  cost  of  labor  and  of  about  one-tenth 
in  the  cost  of  machinery  and  farm  implements.  One- 
fourth  of  a  40  per  cent  decline  in  prices  paid  to  South 
Dakota  farmers  has  taken  place  in  the  last  six  months. 
"On  account  of  high  freight  rates  to  Minneapolis,  South 
Dakota  farmers  are  receiving  considerably  less  for  their 
products  than  those  in  states  nearer  the  milling  centers." 
"Oats  at  15  to  18  cents  are  not  worth  hauling,  while  steers 
at  prices  South  Dakota  livestock  men  receive  hardly  pay 
the  freight,  commission  and  yardage  charges  when  shipped 
to  market." 

"The  demand  for  farm  credits  is  considerably  greater 
than  it  was  a  year  ago,  but  it  is  not  being  supplied.  Were 
credit  obtainable  for  the  purchase  of  cattle,  hogs  and  other 
livestock  there  would  be  some  use  for  the  big  amount  of 
rough  feed  and  feed  grains  that  remains  in  the  farmers' 
hands  and  is  practically  valueless  on  the  market."  The 
reduction  of  "frozen  credits"  in  the  last  six  months  is 
reported  to  have  been  very  slight. 

Surplus  stocks  of  meat  products  in  the  Sioux  Falls 
district  are  reported  to  have  been  absorbed  within  the 
last  year,  most  of  the  movement  taking  place  in  the  last 
six  months.  Costs  have  been  reduced  15  per  cent  in  the 
last  six  months,  materials,  construction  costs  and  labor 
falling  in  the  order  named.  Wholesale  prices  are  reported 
to  have  declined  one-third  in  the  last  six  months  and  about 
40  per  cent  in  the  last  year. 


TENNESSEE 

Population 

Rural,    1,726,659 
Urban,       611,226 

PRODUCTS 
Manufactured  Natural 

a.  Wood  products  a.   Grains 

b.  Textiles  and  cotton  products  b.    Cotton 

c.  Cotton-seed  products  c.   Lumber 

d.  Metal  products  d.   Minerals 

e.  Flour  and  mill  products  e.    Tobacco 

f.   Livestock 

Manufacturing  industries  in  the  Chattanooga  district, 
with  the  exception  of  those  engaged  in  iron  fabricating, 
report  an  output  one-fourth  to  one-half  greater  than  that 
of  six  months  ago,  although  production  of  textiles  and 
furniture  and  other  wood  products  still  is  considerably 
less  than  it  was  at  the  peak  in  1920.  Surplus  stocks  of 
most  commodities  produced  in  the  Chattanooga  region 
have  declined  one-third  to  two-thirds  in  the  last  year. 
The  reduction  on  the  whole  has  been  steady  from  month 
to  month.  In  the  northeastern  part  of  the  state  there  is 
a  surplus  of  textiles,  although  stocks  are  smaller  than  they 
were  a  year  ago  and  smaller  than  they  were  six  months 
ago. 

Costs  of  production  have  dropped  one-third,  materials, 
construction  costs  and  labor  declining  in  the  order  named. 
Taxation  has  increased.  Wholesale  prices  of  manufac- 
tured goods  produced  in  the  eastern  part  of  the  state  have 
declined  on  the  average  50  per  cent  in  the  last  year.  The 
fall  in  the  price  of  cotton  textiles  has  done  much  to  bring 
about  this  average  reduction.  Textile  price  declines  have 
been  slight  in  the  last  six  months.  "The  consensus  of 
opinion  is  that  the  reduction  of  retail  prices  of  all  products 
has  not  kept  pace  with  the  reduction  of  wholesale  prices." 

Production  of  coal,  iron  ore,  bauxite  and  other  metals 
in  the  Chattanooga  district  is  about  the  same  as  it  was  six 
months  ago.  "Coal  production  costs  practically  what  it 
did  a  year  ago,  on  account  of  the  fixed  wages  of  labor  and 
the  high  cost  of  transportation."  The  cost  of  production 
of  clays,  bauxite  and  other  minerals  is  probably  one-third 
less,  except  where  wages  are  fixed.  Surplus  stocks  of 
lumber,  corn,  cattle  and  wool  considerably  larger  than 

72 


those  that  were  held  a  year  ago  are  reported  in  the  north- 
eastern part  of  the  state. 

A  slight  increase  in  the  output  of  wood  products,  grain 
products  and  textiles  in  the  last  few  months  is  reported  in 
central  Tennessee. 

"Virtually  every  manufacturer  in  this  territory  is  over- 
stocked. Most  manufacturers  have  run  their  plants  either 
full  time  or  part  time,  while  sales  were  falling  off.  In 
some  lines  there  has  recently  been  a  noticeable  improve- 
ment in  sales." 

One  report  from  Nashville  is  that  "the  cost  of  pro- 
duction to  manufacturers  in  this  district  is  greater  than 
one  year  ago.  The  cost  of  labor  remains  the  same,  and 
in  some  lines  there  has  been  a  noticeable  decline  in  per 
man  production.  This,  coupled  with  a  slight  increase  in 
freight  rates  and  a  material  increase  in  taxes,  has  brought 
costs  to  a  point  above  the  level  of  even  one  year  ago. 
Nevertheless,  wholesale  prices  of  commodities  produced 
in  this  section  have  declined  somewhat." 

Production  of  lumber  and  minerals  in  central  Ten- 
nessee is  reported  to  have  declined  in  the  last  year  and  in 
the  last  six  months.  Surplus  stocks  of  hay  and  corn  are 
held  by  the  farmers.  In  agriculture  costs  of  labor,  mate- 
rials and  construction  have  declined  in  the  order  named. 

All  manufactories  in  the  industrial  district  about  Mem- 
phis have  decreased  production  in  the  last  year,  although 
the  output  has  not  declined  materially  in  the  last  six 
months.  Surplus  stocks  of  finished  lumber  are  reported. 
Wholesale  prices  of  finished  products  in  this  part  of  the 
state  have  declined  one-fourth  to  one-half  in  the  last  year, 
although  there  has  been  no  appreciable  change  in  the  last 
few  months.  Retail  prices  of  these  products  have  declined 
on  the  average  a  little  more  than  one-fourth,  most  of  the 
decrease  taking  place  in  the  last  six  months.  Surplus 
stocks  of  cotton  and  rough  lumber  are  reported.  A  decline 
in  the  items  of  labor  and  materials  has  reduced  the  cost  of 
agricultural  production  almost  one-half  in  the  last  year. 

In  most  parts  of  the  state  there  has  been  a  reduction 
in  the  volume  of  "frozen  credits"  and  a  lessened  demand 
for  short-time  credits.  "The  lack  of  export  demand,  high 
freight  rates  and  high  taxes  are  the  principal  problems  of 
Tennessee  industries." 


73 


TEXAS 

Population 
Rural,    3,150,539 
Urban,   1,512,689 

PRODUCTS 
Manufactured  Natural 

a.  Meat  and  meat  products  a.    Oil  and  natural  gas 

b.  Oil  products  b.    Lumber 

c.  Cotton-seed  oil  and  cake  c.    Cotton 

d.  Flour  and  mill  products  d.    Livestock 

e.  Finished  lumber  e.    Corn 

f .    Miscellaneous  agricultural 
products 

In  Texas  as  a  whole  a  40  per  cent  decrease  in  the  out- 
put of  lumber  and  cotton  and  a  reduction  of  one-tenth  in 
the  production  of  rice  and  sulphur  is  reported  to  have 
occurred  in  the  last  year.  Crude  oil  production  has  not 
changed  materially,  the  output  of  salt  has  increased  and 
livestock  on  the  ranges  number  more  than  they  did  a  year 
ago.  Surplus  stocks  of  lumber,  cotton  and  rice,  somewhat 
greater  than  those  of  a  year  ago  and  about  the  same  as 
those  of  six  months  ago,  are  reported  in  many  parts  of 
the  state. 

Labor  costs  in  the  agricultural  districts  of  eastern 
Texas  have  dropped  two-fifths  in  the  last  year  and  "ap- 
parently have  reached  the  low  level.  This  augurs  well  for 
next  year's  crops,  but  small  grain  was  largely  put  in 
before  wages  declined  and  very  few  farms  in  this  district 
produced  enough  wheat  to  make  a  profit  at  present 
prices."  Throughout  the  agricultural  and  livestock  dis- 
tricts of  the  state  costs  of  material  and  labor  have  declined 
In  the  last  year  in  the  order  named.  Prices  paid  for 
natural  products  of  Texas  have  dropped  almost  50  per  cent 
in  the  last  year,  but  the  decrease  in  the  last  six  months 
has  been  slight.  Retail  prices  of  these  products  have 
declined  about  two-fifths,  although  the  fall  in  the  last  six 
months  is  reported  to  be  slight. 

The  output  of  oil  refineries,  sugar  refineries,  packing 
houses  and  cottonseed  oil  mills  is  reported  to  be  one- 
fourth  to  one-half  less  than  it  was  a  year  ago.  Production 
of  burlap  and  bags  has  fallen  off  amost  one-third.  On  the 
whole,  however,  the  output  of  Texas  industries  has  in- 
creased slightly  in  the  last  six  months.  Surplus  stocks 
of  packing  house  products,  kerosene  and  fuel  oil  and  some 

74 


cottonseed  products  are  reported  in  the  northeastern  part 
of  the  state.  Abnormal  stocks  of  machinery  used  in  the 
oil  fields,  the  oil  refineries,  the  cotton  mills  and  the  cot- 
tonseed oil  mills  have  been  gradually  reduced  in  the  last 
six  months.  Costs  of  production  in  industry  have  declined 
on  the  average  one-fifth  in  the  last  year,  two-thirds  of  the 
fall  taking  place  in  the  last  six  months.  Wholesale  prices 
of  the  manufactured  goods  produced  in  Texas  have  de- 
creased steadily  throughout  the  year.  Retail  prices  of 
these  products  also  have  decreased  steadily,  but  not  at 
the  same  rate. 

The  volume  of  "frozen  credits"  has  been  gradually 
reduced  during  the  last  six  months,  the  reduction  being 
chiefly  in  industrial  loans.  Large  amounts  of  credit  are 
reported  to  be  tied  up  in  livestock  and  agriculture.  The 
demand  for  short-time  credits  has  decreased  in  the  last 
year  and  in  the  last  six  months.  "Through  Congressional 
legislation  and  the  action  of  government  boards  extraordi- 
nary and  impossible  scales  of  railroad  wages  have  been 
established  and  theoretical  rules  by  which  laborers  obtain 
compensation  for  work  which  is  not  done  have  been  set 
up.  These  standards  have  operated  not  only  to  injure 
railroads,  but  their  evil  influence  has  extended  to  all 
branches  of  industry,  so  increasing  cost  of  production  as 
necessarily  to  retard  industrial  effort."  Foreign  sales  of 
some  Texas  products  are  reported  to  have  increased 
slightly  in  the  last  six  months. 

UTAH 

Population 
Rural,     233,812 
Urban,  215,584 

PRODUCTS 
Manufactured  Natural 

a.  Refined  copper  a.    Hay  and  forage 

b.  Refined  lead  b.    Cereals 

c.  Flour  and  grist  c.   Copper 

d.  Canned  fruits  and  d.    Lead 

vegetables  e.    Sugar  beets 

f.  Livestock 

g.  Fruits  and  vegetables 

Utah  has  larger  crops  this  year  than  in  1920,  but  pro- 
duction of  metals,  cattle  and  cattle  products,  sheep  and 
wool  is  less,  although  there  has  been  no  decline  in  these 

75 


items  in  the  last  six  months.  Surplus  stocks  of  copper 
and  other  metals,  wool  and  cattle  products  are  reported. 
These  surpluses  represent  accumulations  during  the  last 
year,  although  there  has  been  no  material  increase  in  the 
last  six  months.  Large  stocks  of  beet  sugar  also  have 
accumulated.  Costs  of  production  have  declined  one- 
tenth  to  one-fifth  in  the  last  six  months,  the  factors  of 
materials,  labor  and  construction  costs  dropping  in  the 
order  named. 

"High  costs  of  transportation  have  tied  us  up  in  many 
ways.  We  are  unable  profitably  to  ship  cattle  to  market  or 
to  bring  building  materials  in  at  reasonable  costs.  Build- 
ing this  year  was  the  lightest  in  years."  Consensus  of 
opinion  in  Salt  Lake  City  is  that  sufficient  credit  is  avail- 
able within  the  state  to  carry  producers  on  a  proper  basis. 
Except  in  a  few  cases  "frozen  credits"  have  not  decreased 
in  the  last  six  months.  They  consist  largely  of  loans 
extended  before  1921. 


VERMONT. 


Population 

Rural,    242,452 
Urban,    109,976 


PRODUCTS 

Manufactured  Natural  N 

a.  Stone  products  a.   Granite,  marble  and  slate 

b.  Finished  lumber  and          b.    Dairy  products 

wood  products  c.   Lumber 

d.   Varied  agricultural  products 

Production  of  granite,  marble,  slate  and  lumber  in 
Vermont  has  decreased  in  the  last  year  and  in  the  last 
six  months.  A  surplus  of  roofing  slate  in  the  Rutland 
district  has  been  cut  down  steadily  throughout  the  year. 
Most  products  of  the  slate^  granite  and  marble  districts 
are  manufactured  to  order  and  consequently  no  large  sur- 
pluses have  been  accumulated.  Lumber  production  in  the 
state  has  decreased.  A  lessened  demand  for  short-time 
credits  and  a  reduction  of  "frozen  credits"  is  reported. 


76 


VIRGINIA 

Population 

Rural,     1,635,203 
Urban,       673,984 

PRODUCTS 

Manufactured  Natural 

a.  Tobacco  products  a.   Corn 

b.  Cotton  textiles  b.    Tobacco 

c.  Wood   products  c.   Coal 

d.  Paper  and  paper  products  d.    Lumber 

e.  Shoes  and  leather  goods  e.   Vegetables 

f.  Metal  products  f.    Peanuts 

g.  Fertilizers  g.   Fruits 

In  nearly  all  parts  of  Virginia  except  the  south  central 
a  moderate  increase  in  the  output  of  manufactured  com- 
modities, not  altogether  due  to  seasonal  influences,  has 
occurred  within  the  last  few  months. 

Increasing  activity  in  the  lumber  business  and  a  larger 
output  of  iron  and  steel  manufactures,  cigars  and  cigar- 
ettes, vegetable  oils  and  creosoted  products  is  reported  in 
the  southeastern  part  of  the  state.  There  has  been  no 
recent  reduction  of  output  in  any  of  the  industries  in  the 
Richmond  district,  and  production  in  some  lines  has 
increased  within  the  last  few  months.  In  central  Virginia 
an  increase  of  more  than  50  per  cent  in  the  output  of  shoe 
factories  is  reported,  and  production  of  iron  and  steel, 
while  less  than  a  year  ago,  is  a  little  greater  than  six 
months  ago.  Textile  production  is  one-fifth  greater  than 
it  was  six  months  ago  and  almost  equal  to  that  of  a  year 
ago. 

Surplus  stocks  of  finished  products  are  reported  in 
none  of  the  industrial  sections  of  Virginia  except  the 
extreme  southwestern,  where  abnormal  stocks  of  furni- 
ture, chemicals  and  alkali  products  are  in  the  hands  of 
manufacturers,  and  the  south  central  part  of  the  state, 
where  surpluses  of  cotton  goods  and  wood  products  are 
held. 

Wages  in  manufacturing  have  been  reduced  one-fifth 
to  one-third  in  the  last  year,  except  in  tobacco  factories, 
and  costs  of  raw  materials  are  considerably  lower,  but 
taxation  and  transportation  costs  have  not  been  reduced. 
Wholesale  prices  of  goods  manufactured  in  Virginia, 
except  tobacco  products,  have  decreased  in  varying  de- 

77 


grees,  but  at  uniformly  steady  rates  throughout  the  year. 

Surplus  stocks  of  raw  cotton,  lumber,  corn,  cattle  and 
wool  are  reported  in  south  central  and  southwestern  Vir- 
ginia, but  abnormal  supplies  of  natural  products  in  the 
eastern  part  of  the  state  have  been  absorbed  during  the 
year.  Most  crops  are  short  this  year  as  compared  with 
1920,  and  the  output  of  lumber  and  wool  has  been  cur- 
tailed. 

On  the  whole,  prices  received  for  natural  products  of 
Virginia  have  declined  little,  if  any,  in  the  last  six  months, 
although  prices  are  uniformly  much  lower  than  in  Octo- 
ber, 1920.  "Farm  labor  is  materially  cheaper  than  last 
year,  but  other  farm  expenses  were  not  much  lower  when 
crops  were  planted.  Farmers  have  made  crops  much  more 
cheaply  by  rigid  economy  and  personal  labor." 

The  volume  of  "frozen  credits"  has  decreased  some- 
what, "but  the  banks  are  carrying  a  large  volume  of 
credits  that  would  normally  be  liquid  but  are  not,  because 
of  the  severe  decline  in  the  value  of  farm  products." 

"It  is  commonly  recognized  that  America  must  have 
foreign  markets  for  her  surplus  products,  both  manufac- 
tured and  agricultural." 


WASHINGTON 

Population 

Rural,    607,886 
Urban,   748,735 

PRODUCTS 
Manufactured  Natural 

a.  Lumber  products  a.  Lumber 

b.  Cereal  products  b.  Wheat  and  other  grains 

c.  Meat  products  c.  Fruits  and  vegetables 

d.  Canned  fruits  d.  Hay  and  forage 

e.  Canned  fish  e.  Livestock 

f.  Metal  products  f.  Fish 

g.   Dairy  products 

In  the  manufacturing  section  of  western  Washington, 
which  lies  largely  in  the  district  bordering  Puget  Sound, 
production  of  virtually  all  finished  goods  has  increased 
materially  during  the  last  few  months.  Improvement  has 
been  noticeable  in  the  clothing  and  textile  industries, 
which  were  operating  on  a  very  low  plane  a  year  ago. 
"The  volume  is  now  larger  than  at  any  time  during  the 

78 


.past  year."  Production  of  steel  and  iron  goods,  wood 
products,  meat  products  and  confections  has  shown  a 
slight  improvement  recently.  Prices  of  all  finished  goods 
produced  in  the  Puget  Sound  district  are  reported  to  have 
declined  about  one-third  in  the  last  year,  two-thirds  of 
the  reduction  taking  place  in  the  last  six  months.  Retail 
prices  of  these  goods  have  declined  about  one-fifth,  the 
drop  in  the  last  six  months  being  twice  as  great  as  that 
in  the  preceding  six  months.  Industrial  costs  have 
dropped  on  an  average  20  per  cent,  the  items  of  materials, 
construction  and  labor  falling  in  the  order  named.  In 
some  industries  "absolutely  no  cut  has  been  made  in 
wage  scales." 

A  surplus  of  steel  products  and  a  stock  of  furniture 
slightly  greater  than  normal  are  reported,  but  "generally 
speaking  stocks  have  been  worked  down  until  at  present 
there  is  no  great  surplus." 

During  the  summer  of  1921  western  Washington  pro- 
duced less  lumber  than  in  the  summer  of  1920,  but  "dur- 
ing the  past  few  weeks  production  has  been  increased  and 
there  is  now  a  better  demand  and  a  larger  production  than 
six  months  ago.  A  marked  increase  in  foreign  demand  for 
lumber,  salmon,  flour,  milk  and  canned  goods  has  come  in 
the  last  two  months."  In  the  middle  of  September  the 
condition  of  all  crops  in  western  Washington  was  re- 
ported to  be  uniformly  good  and  at  an  output  at  least  as 
great  as  that  of  1920  was  expected.  A  surplus  stock  of 
canned  fruits  that  existed  a  year  ago  has  been  gradually 
reduced.  In  the  farming  section  a  decline  in  the  costs  of 
labor,  materials  and  construction  in  the  order  named  is 
reported  to  have  been  progressive  throughout  the  year, 
while  the  rapid  decline  of  prices  paid  to  farmers  for  their 
products  has  been  checked. 

The  volume  of  "frozen  credits"  in  western  Washing- 
ton is  reported  to  have  been  decreased  one-fifth  to  one- 
third  in  the  la,st  six  months.  "The  transportation  problem 
has  been  a  material  factor  in  producing  the  unsatisfactory 
situation  in  the  lumber  industry.  Some  of  the  building 
trades  have  been  working  on  a  reduced  wage  scale  for 
several  months,  and  quite  recently  there  has  been  a  revival 
of  residence  building." 

There  have  been  bumper  crops  in  the  fruit-raising 
district  in  central  Washington,  and  this  year's  production 
will  greatly  exceed  that  of  1920.  Agricultural  costs  in  the 
Yakima  and  Wenatchee  valleys  have  been  greatly  re- 
duced, while  fruit  prices  have  not  declined  in  the  last  year, 
and  in  some  instances  have  increased.  Hay  and  grain 

79 


prices  have  decreased.  The  demand  for  short-time  credits 
has  increased  considerably  as  a  consequence  of  the  harv- 
est. "There  has  been  some  decrease  in  the  volume  of 
'frozen  credits/  but  the  greatest  reduction  will  be  within 
the  next  three  months."  Industrial  production  in  eastern 
Washington  is  about  the  same  as  it  was  six  months  ago, 
although  the  output  of  wood  products,  packed  meats, 
flour,  clothing  and  other  commodities  is  less  than  it  was 
a  year  ago.  Surplus  stocks  of  manufactured  goods  are 
about  one-third  less  than  they  were  a  year  ago  and  are 
not  much  above  normal.  Wholesale  prices  of  finished 
goods  produced  in  eastern  Washington  are  reported  to 
have  declined  almost  one-half  in  the  last  year,  with  no 
considerable  change  in  the  last  six  months.  Retail  prices 
of  these  goods  have  dropped  one-third. 

Agricultural  production  in  eastern  Washington  is  10 
per  cent  greater  than  a  year  ago.  A  surplus  of  soft  wheat 
very  much  greater  than  that  a  year  ago  is  reported,  but 
this  is  largely  seasonal.  Agricultural  costs  are  reported 
to  have  declined  one-fourth  in  the  last  year,  the  principal 
reduction  being  in  the  cost  of  labor.  While  prices  paid 
for  wheat  on  eastern  Washington  farms  have  been  reduced 
about  one-half  since  August,  1920,  there  has  been  no 
reduction  in  the  last  few  months. 

The  output  of  lumber  in  eastern  Washington  is  re- 
ported to  be  less  than  one-half  as  large  as  that  a  year  ago 
and  about  70  per  cent  of  the  production  six  months  ago. 
There  is  a  considerable  surplus  of  lumber.  Copper  and 
zinc  production,  far  less  than  it  was  a  year  ago,  has  not 
decreased  in  the  last  six  months  and  a  slight  improvement 
in  lead  production  is  reported  to  have  taken  place  recently. 
There  are  large  surplus  stocks  of  copper  and  zinc  and  a 
small  surplus  of  lead.  Generally  speaking,  the  cost  of 
mining  has  been  reduced  steadily  during  the  year,  due 
principally  to  wage  reductions.  Copper,  zinc  and  lead 
prices  in  eastern  Washington  have  declined  about  40  per 
cent  in  the  last  year,  but  not  more  than  10  per  cent  in 
the  last  six  months.  "Frozen  credits"  in  this  part  of  the 
state  have  been  reduced  considerably  in  the  last  six 
months. 


80 


WEST  VIRGINIA 

Population 
Rural,     1,094,694 
Urban,       369,007 

PRODUCTS 
Manufactured  Natural 

a.  Lumber  products  a.   Coal 

b.  Steel  products  b.   Natural  gas 

c.  Glass  c.    Petroleum 

d.  Corn  and  other  grains 

e.  Livestock 

f.  Lumber 

g.  Tobacco 

Coal  production  throughout  West  Virginia  is  reported 
to  be  less  than  half  as  great  as  it  was  a  year  ago.  The 
output  of  lumber  also  has  been  reduced  about  50  per  cent 
and  the  decline  in  oil  and  gas  production  has  been  great, 
although  the  output  of  all  three  commodities  has  not 
fallen  materially  in  the  last  six  months.  Surplus  stocks 
of  oil  and  of  lumber  are  reported  in  some  parts  of  the 
state.  Rates  of  wages  of  mine  labor  fixed  by  the  govern- 
ment will  be  effective  until  the  spring  of  1922.  The  cost 
of  production  of  coal  has  not  decreased  in  the  last  year, 
although  the  price  received  by  the  operators  at  the  mines 
is  reported  to  be  much  less  than  it  was  a  year  ago.  Oil, 
lumber  and  cattle  prices  in  the  state  have  been  cut  in  two 
in  the  last  year,  but  have  declined  little  in  the  last  six 
months. 

Production  of  steel,  tin-plate,  window  glass  and  pot- 
teries has  declined  on  the  whole  more  than  two-thirds 
since  the  fall  of  1920,  but  there  has  been  no  reduction  in 
the  last  few  months.  Reports  from  the  Charleston  district 
are  that  nearly  all  chemical  plants  are  closed  and  wood- 
working plants  have  reduced  their  output  50  per  cent. 
Surpluses  of  chemicals  and  wood  products  are  reported. 
Costs  of  production  in  industry  have  declined  in  the  fol- 
lowing order:  materials,  construction  and  labor.  Taxation 
and  transportation  costs  remain  high,  and  in  some  parts  of 
the  state  the  reduction  in  other  items  is  reported  to  have 
been  very  small.  "One  manufacturer  has  not  made  a 
reduction  in  wages,  but  feels  that  the  greater  efficiency  of 
his  employees  is  working  to  reduce  his  costs  of  produc- 
tion." Wholesale  and  retail  prices  of  goods  manufactured 
in  West  Virginia  are  reported  to  have  dropped  steadily 

81 


throughout  the  year,  the  greater  part  of  the  retail  decline 
coming  in  the  last  six  months. 

"I  believe  the  most  serious  thing  we  have  to  face  is  the 
wage  readjustment.  Prices  of  all  materials  and  of  trans- 
portation will  drop  as  soon  as  a  readjustment  of  the  wage 
scale  becomes  general  in  industry." 

In  some  parts  of  the  state  a  shortage  of  credit  is 
reported,  although  the  volume  of  "frozen  credits"  has 
decreased  one-fifth  in  the  last  six  months  and  the  demand 
for  short-time  credits  is  not  so  great  as  it  was  last  spring. 

WISCONSIN 

Population 

Rural,    1,387,499 
Urban,  1,244,568 

PRODUCTS 
Manufactured  .  Natural 

m..  Iron,  steel  and  heavy  machinery  a.    Hay  and  forage 

b.  Leather  and  leather  products  b.   Cereals 

c.  Textiles  c.   Livestock 

d.  Meats  and  meat  products  d.   Dairy  products 

e.  Motor  vehicles  and  accessories  e.   Vegetables  and 

f.  Chemicals  and  drugs  fruits 

g.  Wood  products  f.   Lumber 
h.  Flour  and  cereal  products 

Production  of  motor  vehicles  and  accessories,  leather 
and  leather  goods,  knit  and  woven  goods,  clothing,  flour 
and  cereals,  and  rubber  goods  has  increased  one-fourth  to 
three-fourths  in  the  last  six  months,  according  to  reports 
from  the  industrial  section  centering  in  Milwaukee.  The 
output  of  iron,  steel  and  heavy  machinery  and  electrical 
supplies  has  declined  somewhat  in  the  same  period,  and 
production  of  agricultural  implements,  farm  equipment, 
motor  vehicles  and  accessories  and  most  other  commod- 
ities manufactured  in  this  region  is  far  lower  than  it  was 
a  year  ago.  Surplus  stocks  of  most  kinds  of  goods  pro- 
duced in  the  Milwaukee  district  have  been  almost  entirely 
absorbed  in  the  last  six  months. 

On  the  whole,  manufacturing  costs  have  decreased  25 
to  35  per  cent,  most  of  the  reduction  coming  in  the  last 
six  months.  Materials,  labor  and  construction  costs  have 
declined  in  the  order  named.  An  average  reduction  of 
almost  two-fifths  in  wholesale  prices  of  manufactured 
articles  is  reported.  Retail  prices  of  these  commodities 
have  also  declined,  principally  in  the  last  six  months. 

82 


Production  of  lumber  and  metals  in  Wiscinsin  is  con- 
siderably less  than  it  was  a  year  ago,  but  the  dairying 
industry  throughout  the  state  remains  firm.  Surplus 
stocks  of  some  grains  and  of  wool  are  reported.  Labor 
costs  in  agriculture  have  been  cut  almost  in  half,  and 
materials  have  declined  somewhat,  although  the  costs  of 
farm  machinery  remain  high.  Taxation  has  increased. 
Farm  products  of  Wisconsin,  of  course,  have  shared  the 
common  price  decline,  but  prices  have  fallen  very  little  in 
the  last  few  months. 

"Wisconsin  is  a  dairy  state  of  the  first  magnitude,  and 
although  the  price  of  dairy  products  to  the  farmer  has 
shrunk  about  50  per  cent,  there  is  no  foundation  for  the 
feeling  that  the  farmers  are  going  to  slaughter  or  abandon 
their  herds,  as  is  evidenced  by  the  fact  that  the  Milwaukee 
market  is  receiving  from  15  to  25  per  cent  more  milk  and 
butter  now  than  a  year  ago." 

Throughout  the  state  a  material  reduction  in  the 
volume  of  "frozen  credits"  is  reported,  although  in  cer- 
tain rural  districts  there  has  been  an  increase  and  some 
of  the  larger  industries  "still  lean  heavily  on  the  banks." 

Factors  working  against  readjustment  are  "slow  read- 
justment of  wages  to  the  prevailing  price  levels,  the  at- 
tempt to  maintain  prices  in  certain  lines,  disproportionate 
costs  of  transportation,  continuation  of  high  level  of  gov- 
ernmental expenditure  in  the  face  of  a  drastic  fall  in 
prices  and  difficulties  in  the  way  of  export  trade."  Foreign 
sales  of  products  manufactured  in  Wisconsin  have  de- 
creased in  the  last  year  and  in  the  last  six  months. 

WYOMING 

Population 

Rural,     137,054 
Urban,     57,348 

PRODUCTS 
Manufactured  Natural 

a.   Flour  and  grist  a.   Sheep  and  wool 

b.  Cattle 

c.  Hay 

d.  Wheat 

e.  Minerals 

f.  Dairy  products 

A  severe  drought  that  caused  heavy  shipments  of  live- 
stock in  the  fall  of  1919,  a  hard  winter  in  1919-20  and  a 
great  depreciation  in  livestock  values  in  the  last  eighteen 

83 


months  have  demoralized  cattle  and  sheep  production 
throughout  Wyoming.  "The  shortage  of  breeding  stock 
is  so  acute  that  the  whole  industry  will  be  greatly  injured 
unless  some  means  is  found  to  provide  financial  relief 
that  will  save  the  cattle  remaining  on  the  ranges  from  the 
market." 

There  are  a  large  number  of  reports  of  forced  sales  of 
cattle  and  sheep  and  wool  at  prices  far  below  the  costs  of 
production.  Costs  of  production,  however,  are  reported 
to  have  declined  greatly  in  the  last  year  and  particularly 
in  the  last  six  months,  and  "if  railroad  rates  would  come 
down  it  would  be  possible  to  sell  at  a  profit."  "With 
hides  selling  here  at  50  to  75  cents  each  and  shoes  little 
below  peak  prices  and  with  fat  cattle  at  8  cents  a  pound 
and  cuts  of  steak  at  35  to  45  cents  a  pound,  there  is  too 
great  a  difference  between  the  price  the  cattleman  receives 
for  his  products  and  the  prices  he  has  to  pay  for  them 
when  he  buys  them  back  in  other  forms." 

Surplus  stocks  of  beet  sugar  and  oil  are  reported  in  the 
Big  Horn  Basin.  Costs  of  materials  and  labor  in  the  oil 
fields  of  this  district  have  been  reduced  in  the  order 
named,  while  in  the  beet  fields  and  on  the  farms  the  order 
of  reduction  has  been  reversed.  Oil  production  has  fallen 
off  about  one-half.  The  reduction  in  the  number  of  head 
of  livestock  has  resulted  in  the  accumulation  of  a  large 
surplus  of  hay. 

Credit  shortages  are  reported  in  virtually  every  part 
of  the  state.  On  the  whole  the  volume  of  "frozen  credits" 
has  increased  rather  than  decreased  in  the  last  year. 


84 


UNIVEESITY   OF    CALIFOENIA   LIBEAEY, 
BEEKELEY 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED   BELOW 

Books  not  returned  on  time  are  subject  to  a  fine  of 
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demand  may  be  renewed  if  application  is  made  before 
expiration  of  loan  period. 


A  -    4    1930 


MM  6 


67J 


50m-7,'29 


YC  27163 


452320 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


